Thank you, Mr. Chair.
Good afternoon. Thank you for the invitation to offer our perspective on efforts to stabilize food prices.
There are approximately 6,900 independent grocers in Canada. Many of those independents are also located in communities where they are very often the only grocery store. Issues around reliable supply and food prices in those areas are closely linked to food security. Independent grocers have a symbiotic relationship with the communities they serve. They live in the community, hire locally, buy locally and support local sports teams, activities and causes. This bond they have forged in myriad diverse communities is why they are such an important part of the tapestry that makes up this country.
Naturally, independent grocers are extremely sensitive to concerns around the inaffordability being felt by their customers. That is why the suggestion that there is “greedflation” taking place in the food industry is something our members find unfortunate. When you are an independent grocer with an overall average margin of 2% and you're receiving price increases from your suppliers that are often in the double digits, sometimes more than once a year, in what business model can you not pass on those costs to your customers?
We all know about the issues that have impacted the industry. Some of the more significant issues have been climate change; the war in Ukraine; port, rail, border and labour disruptions; and significant increases in transportation costs. These are felt more acutely by independents in rural and remote communities.
It's not really about what has happened to the food industry; it's more about what has not happened. That's why we don't point our fingers at our supplier partners. We understand the pressures that are driving up their costs. We also understand the desire of the government—I know it would be shared by this committee and all parties—to see price stability in the food industry. Who would not support that objective?
However, efforts to stabilize food prices can sometimes have unintended consequences. For example, if, as a result of making commitments to the government, retail chains use their leverage to impose price freezes or discounts on their suppliers, where does that leave the independent grocer and their customers? An independent grocer has no leverage to demand a price freeze or a drop in price. If government wants price stability, it has to be for all Canadians. It shouldn't depend on where you shop or where in Canada you happen to live.
The need for price stability and reliable supply for all Canadians is why we strongly support the proposed grocery code of conduct. The code will provide fairness and more balance in relationships within the industry.
The Canadian grocery industry is one that is overly consolidated. This has fostered a climate in which unfair and distorted market practices are all too prevalent. Unilateral and onerous fees imposed by some large retailers on their suppliers, and the need for reliable access to food supply for independent grocers, raised alarm bells for Ottawa and the provinces. In November 2020, there was a mandate given by federal, provincial and territorial ministers to the steering committee developing the code, of which I am a member.
It states:
Ministers discussed the concerns of processors, producers and independent grocers regarding increased retailer fees on suppliers and the need for balance in the supplier-retailer relationship, while also ensuring that Canadians continue to have access to a reliable food supply at affordable prices.
This code is not a document comprising overly prescriptive regulations; it's simply a straightforward set of principles of good behaviour developed by the industry itself. That’s it. It won't increase food prices, as Loblaws claimed. No one in the industry would support any measure that does that. No company should try to put a price tag on principles of good behaviour.
In an op-ed about the code in the Toronto Star last week, I quoted a former U.S. Supreme Court justice, who said, “Ethics is knowing the difference between what you have a right to do and what is right to do.” That is what the code is all about. It outlines what the industry itself feels is right to do when conducting business.
Just a few months ago, the Competition Bureau of Canada, in its market study report, welcomed the code as a good thing for consumers. The bureau also recommended that governments—federal and provincial—do more to support the growth of independent grocers.
The playing field in Canada will never be level for independents, but independent grocers would welcome governments doing more to just keep them on the playing field. Governments and this committee need to look at whatever measures they can to help support the Main Street grocers of Canada. One such measure would be the code, and giving that code a chance to work. We need all the support we can get to have that chance, including from this committee.
Thank you.