Yes.
Evidence of meeting #51 for Agriculture and Agri-Food in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was inflation.
A recording is available from Parliament.
Evidence of meeting #51 for Agriculture and Agri-Food in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was inflation.
A recording is available from Parliament.
7:25 p.m.
Executive Chair of the Board and Chief Executive Officer, Maple Leaf Foods Inc.
Yes.
7:25 p.m.
Liberal
7:25 p.m.
Executive Chair of the Board and Chief Executive Officer, Maple Leaf Foods Inc.
7:25 p.m.
Executive Chair of the Board and Chief Executive Officer, Maple Leaf Foods Inc.
If you define competitiveness as your cost competitiveness or being cost-competitive, the answer is no. It adds cost to our system in several areas. We've accepted that. We have a deep belief in the ethos of multi-stakeholderism and shared value creation. We embrace the magic of the word “and” and reject the tyranny of the word “or”, which to us means we look to satisfy all the stakeholders and meet their needs. We reward our shareholders for our commitments to social shift by making it more attractive to do more business with us at the same price, which is lucrative for the shareholders.
We have a pipeline of customers who want to do more business with us because we are who we are, even though we don't charge for most things. We do have to elevate our price for some things that we do, not the least of which is the process of raising animals without antibiotics, which is a significant portion of our portfolio. We have to pass on the additional cost.
7:30 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Is there then a sustainability advantage at the very least for Maple Leaf Foods?
7:30 p.m.
Executive Chair of the Board and Chief Executive Officer, Maple Leaf Foods Inc.
Yes, there is. There is today, by virtue of the fact that we're small enough in the North American industry to be rebellious and large enough to commercialize our rebellious ideas. At the end of the day, the answer is yes. It attracts more business to Maple Leaf Foods.
7:30 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
I know you've made significant efforts in reducing your carbon footprint as a company. I'm sure that's had an impact on reducing your operational costs to some degree. Is that true?
7:30 p.m.
Executive Chair of the Board and Chief Executive Officer, Maple Leaf Foods Inc.
Yes, it is. For that particular example, the answer is yes. My prior comment was not exclusively true, but it's true in aggregate.
7:30 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
I get it.
In terms of enabling you as a company to absorb some of the inflationary pressures and shocks we've been under, do you think that this reduction in operational costs has created some added ability for you to absorb those shocks?
7:30 p.m.
Executive Chair of the Board and Chief Executive Officer, Maple Leaf Foods Inc.
Given that our profitability was down 60% to 70% through to the third quarter of last year, I would only factually say the answer is no, but maybe in the future.
7:30 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Okay.
You talked about a bold vision. You have also been doing the Centre for Action on Food Security, which has a pretty bold vision for reducing food insecurity. What are the trade-offs?
You mentioned profit margins being razor-thin. You see a core responsibility to offer food affordably and a commitment to reducing food insecurity by 50% by 2030. That's a pretty tall order.
What are the trade-offs there, and how do those things interact? Can you give me a bit of an overview?
7:30 p.m.
Executive Chair of the Board and Chief Executive Officer, Maple Leaf Foods Inc.
I think the plight of food insecurity in Canada and around the world is a very complex one. It's based on a series of interdependent root causes. We need to find systemic answers to those root causes. They include things like access, nutritional and financial literacy, mental illness and disability. Over 50% of all those who are food insecure are people with disabilities. There are a range of causes in addition to income and poverty.
I think the solution is found in systemic solutions. Probably the heavy hitter is strengthening the social safety net we have in Canada versus other jurisdictions.
7:30 p.m.
Liberal
The Chair Liberal Kody Blois
We'll leave it at that. Thank you, gentlemen.
Over to Mr. Perron now.
Mr. Perron, you have the floor for two and a half minutes.
7:30 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
Thank you, Mr. Chair.
Mr. Donaldson, I'm going to carry on with the same topic as previously.
If I understood correctly what you told Mr. MacGregor, you are impacted by problems with negotiations and price-setting, fees that are charged for unsold merchandise and loyalty program financing.
Can you please tell us more?
7:30 p.m.
Chief Executive Officer, BC Food and Beverage, Food and Beverage Canada
Yes, certainly.
I don't want to repeat what was said earlier, but I want to clarify this. The code of conduct has been brought up a few times and was in our notes. I don't see it as a magic bullet for solving food pricing issues; it's more about bringing balance to the overall food system. Right now we have a small number of large retail customers and a very large number of small suppliers. This creates imbalance and makes things very complicated.
Honestly, when you don't have the leverage of a larger company, it's very hard even to get their attention. One of the key issues we're finding is just getting their attention. You'll hear from the retailer when they need you for something. However, if you need something from them or have to set up a meeting to discuss some of your pricing, costs or challenges, you generally don't hear back. It's been very complicated that way, even in trying to have that collaborative dialogue and find a mutually agreeable solution to some of the challenges.
7:35 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
If I understand you correctly, Mr. Donaldson, you're telling me that the problems vary depending on the size of the business. Perhaps that's why Mr. McCain was saying that he is agnostic when it comes to a code of conduct. The smaller the business, the weaker its negotiating power. The smaller businesses find themselves increasingly at the mercy of the retailers, who can sometimes impose unfair conditions.
Is that indeed the situation?
7:35 p.m.
Chief Executive Officer, BC Food and Beverage, Food and Beverage Canada
That's correct.
7:35 p.m.
Bloc
Yves Perron Bloc Berthier—Maskinongé, QC
I think that we have said everything that needs to be said about a code of conduct.
Mr. Frigon, I will ask you my last question. Do you have any comments? Is there a recommendation that you really want to highlight?
You have 10 seconds to provide an answer.
March 6th, 2023 / 7:35 p.m.
President and Chief Executive Officer, Dairy Processors Association of Canada
Thank you.
Just as Mr. Donaldson was saying earlier, I believe that the reality of plants that can only sell their products in Canada is very different from that of those that can look to many markets in various countries.
Generally, as you know, the dairy sector plants can only sell their products in Canada because of the supply management system, and this means that the reality for the various agri-food sectors' can differ greatly.
I'm not surprised to hear differing views or...
7:35 p.m.
Liberal
The Chair Liberal Kody Blois
Thank you very much, Mr. Frigon and Mr. Perron.
Finally, Mr. MacGregor, you have two minutes and 30 seconds, my friend.
7:35 p.m.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you very much, Mr. Chair.
Mr. Donaldson, I'd like to turn to you for this final question of mine.
Some of the big retailers have their in-house brand of private products. Loblaws of course has the No Name products, which famously experienced a price freeze that didn't last very long. My own local grocer, Thrifty, which is owned by Empire, has the Compliments brand.
How do those in-house private brands that the retailers own...? What is your company's relationship in manufacturing those and providing the foodstuffs to make them? How has that affected the whole relationship that you experience with the big grocers?
7:35 p.m.
Chief Executive Officer, BC Food and Beverage, Food and Beverage Canada
Thank you for your question. That's a broad question, so I'll try to be brief.
A lot of our members do provide private label products to different retailers. It becomes an important part of their business. Sometimes it's just a way to get into the store. It's also for remaining competitive. If you have capacity, it's also a great way to fill a facility to capacity and cover its overhead costs.
It has been interesting that we've seen a real shift with retailers. We're seeing an ever-growing presence of private label products on their store shelves. It's becoming a strategic priority for those retailers. That's actually creating less shelf space for the branded products that our members represent.
On one hand, it's helpful for them, and a lot of our members do play in that arena. On the other hand, we're concerned about the impact over the long term on branded products that are going to be on shelves. We know a lot of people that provide private label and the retailer won't carry their branded product because they are making their private labels. It makes for some difficult choices.
7:35 p.m.
Liberal
The Chair Liberal Kody Blois
Thank you, Mr. MacGregor.
Thank you, Mr. Donaldson.
Mr. McCain, I have one question for you about the regulatory competitiveness element.
You talked about a ton of feathers. Is the answer then to try to have some element or some type of lens around competitiveness with our regulatory agencies or our bodies on the federal level? What I heard in the answer to Mr. Steinley was that you could look at one certain area and you might pull a couple of feathers out, but there's still a ton of feathers.
How do you alleviate that? Is it just trying to create that lens throughout multiple agencies?