With food prices on the rise and consumers in mind, the Competition Bureau of Canada is undertaking a market study into grocery store competition.
The examination will look at how governments could combat grocery price increases through more competition in the sector, the independent agency said in a statement on Monday.
The study will consider:
- To what extent higher grocery prices are a result of changing competitive dynamics;
- What lessons can be learned from other countries to increase competition; and
- How governments can lower barriers to entry to stimulate competition.
“Canadian consumers have seen their purchasing power decline. This is especially true when buying groceries. In fact, grocery prices in Canada are increasing at the fastest rate seen in 40 years,” said the competition agency.
“Many factors are thought to have impacted the price of food including extreme weather, higher input costs, Russia’s invasion of Ukraine, and supply chain disruptions. Are competition factors also at work? To find out, the Bureau will study this issue.”
The agency, which focuses on protecting and promoting competition in Canada, will be examining this issue over the next several months, with plans to have its findings by June 2023.
Submissions from “interested parties” on retail grocery competition in Canada will be accepted until Dec. 16.
This move comes amid heightened political attention on the rising cost of groceries. Last week, the House of Commons unanimously passed an NDP motion calling on the federal government to take steps to tackle “greedflation,” including asking the competition bureau to investigate grocery chain profits.
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As well, the House Agriculture and Agri-Food committee has agreed to take on a study into the cost of groceries and inflation in the food supply chain. As part of this work MPs are expected to call on industry stakeholders including grocery executives, economists, and farmers, vowing to “get to the bottom” of rising grocery costs.
“This is a great step, and I don’t doubt for a second that it is the result of pressure from Parliament’s vote last week,” tweeted NDP MP Alistair MacGregor who was behind his party’s push for the committee study and last week’s opposition day motion.
In Monday’s statement, the bureau noted that the study is “not an investigation into specific allegations of wrongdoing.”
“If we do find evidence during this study that someone may be doing something against the law, then we will investigate and take appropriate action,” the agency said.