Agriculture Committee on Dec. 11th, 2023

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you very much, Mr. Chair.

Thank you very much, Mr. La Flèche, for having made yourself available to us a second time.

I'd like to continue on the same topic. The minister, Mr. Champagne, implied that the meeting with grocery store heads had been productive.

Can you tell us exactly what more you have done since this meeting? Have you, for example, made any changes to your practices following the meeting with the minister?

You've been saying from the outset that you are continuing to take action, and I understand that, but has anything actually changed?

[Eric La Flèche]

As I explained to the minister, and as we noted when we were listing the things we were doing for our consumers, we are trying to offer products that are the best possible value in a difficult context. We are very much aware of the fact that our customers have been affected by inflation. If we are to succeed, we have to meet their needs and they need to get value for their money. They need to be offered good products at the lowest possible prices, week after week, in all our stores, under our various banners.

As I just explained to Ms. Taylor Roy, things are constantly changing in an extremely competitive and highly dynamic market. We adapted our business strategies to this context to become more relevant and to offer as much as possible to our customers, as we always do.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

I understand that you've always done that and that you are continuing to do so. At the end of the day, the meeting with the minister, Mr. Champagne, has not changed much, as far as I can see.

I'd like to talk about the code of conduct. I like what you said about this, but would just like to confirm the information I have.

You've been continuously and constructively involved in the discussions and your company is ready to subscribe to the code. Is that correct?

[Eric La Flèche]

Yes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Great.

How do you interpret the fact that some companies not at the negotiation table said at the last minute that they would not subscribe to the code? What would happen if none of the companies bought into it?

[Eric La Flèche]

As I said before, for an industry code of conduct, all those involved, and particularly the major players, need to subscribe.

We think that this code reflects the market conditions in which we are operating and how we work with our suppliers. We hope that some of our competitors who have been hesitating will agree to the conditions. I know that the code contains a lot of legal clauses. I won't comment on any specific clauses, sections or paragraphs, but overall, we are happy with this code. It's not perfect, but we think that it's a good starting point.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

You believe that this code will have an impact on price reductions in the medium and long term, right?

[Eric La Flèche]

No, I didn't say that.

The purpose of the code is not to regulate or manage prices or inflation. Its goal is to increase transparency in relations between the suppliers and us, the retailers. I think the proposed wording does that. It reflects Metro's current practices, which would continue to apply in future.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Can we at least expect some price stabilization, or is that a secondary factor?

[Eric La Flèche]

No, the code is not among those factors that have an impact on prices. The code has to do with managing relationships. It determines who can do what and when they can do it. It establishes conditions and other things like that. The code does not address the prices of raw materials.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

So the goal of the code is also to increase transparency within the industry and in relations between the various players.

The last time you appeared before the committee with a number of other grocery chain heads, you all said, when discussing your profit margins, that the numbers didn't represent your profit margin on your grocery sales, and that your net profit margin had remained the same. When we asked you to break down your profits, you all said that we couldn't have those numbers because your firms were in competition with one another. I asked you, and the others, if you were going to provide these figures to the Competition Bureau so that they could study them, and everyone said yes. Feel free to correct me if I'm wrong, but I'm pretty sure I've got that right.

However, in the first few pages of the report that the Competition Bureau published afterwards, it complained that it hadn't received all the figures.

Did your company provide the requested figures?

[Eric La Flèche]

We worked with the Competition Bureau and gave it the figures it had requested. We may not have given them all the figures, but those to which you are alluding, meaning our profit margins for the food sector and pharmacy operations, were provided.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

So you kept your word in this regard.

Why do you think some did not do so?

[Eric La Flèche]

I can't speak for the others. I don't know what they were specifically asked to provide.

The Competition Bureau asked us for all kinds of information. We weren't able to provide some of it, because we didn't even have that information ourselves. However, as I just mentioned, we provided the Competition Bureau with information about our profit margins for the food sector and pharmacy operations.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you.

In any event, it's being worked on now. There's a bill that would increase the powers of the Competition Bureau to allow it to force companies to provide figures. So that shouldn't happen again.

I'd like to ask you an additional question. In the same bill, there is an attempt to identify the extent to which competition in the sector could be increased, for example by encouraging the entry of new companies.

How would your company view potentially increased competition in the grocery chain sector? Would you be in favour of that?

[Eric La Flèche]

As I mentioned several times, we are in a highly competitive industry that has some very large firms, some of which are international. There are also many local independent companies representing every nationality. The industry is a free market. There are no regulatory barriers to entering our industry. Competition is a good thing and there's a lot of it. So any companies that want to enter this market are free to do so.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

So according to you, increased competition would not be a negative factor.

[Eric La Flèche]

Competition is never negative. Everyone improves when there's competition.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

We agree on that Mr. La Flèche.

Thank you very much.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Perron.

Mr. MacGregor, you have the floor.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Chair, just before I give my six minutes to Mr. Boulerice my colleague, I just want to read a notice of motion into the record. It goes as follows:

That given the recent opposed votes in the House of Commons to Supplementary Estimates (B), specifically vote 1b in the amount of $16,108,492, vote 5b in the amount of $11, 383,559, and vote 10b in the amount of $34,211,000 for the Department of Agriculture and Agri-Food, and vote 1b in the amount of $19,763,134 for the Canadian Food Inspection Agency; the committee undertake a study to examine the effect negative votes on these supplementary estimates would have had on food safety, market access, and on farmers, ranchers, and producers; that the Parliamentary Budget Officer be included as a witness to provide analysis of these effects; that the committee report its findings to the House; and, [that] pursuant to Standing Order 109, the government table a comprehensive response to the report.

With that, I will give my six minutes to Mr. Boulerice.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you Mr. MacGregor

Thank you Mr. Chair.

Mr. La Flèche, thank you for being with us today to answer our questions.

A few weeks ago, the minister, Mr. Champagne, took a great deal of pride in saying that he had summoned you to Ottawa to tell you to stabilize prices or make an effort to help people struggling with the rising price of food.

A few weeks later, you gave an interview on TVA in which you admitted rather frankly that it had not had any impact on your practices, prices, or discounts. It was around Thanksgiving and turkey was on sale, just as it is every year, and you pointed that out.

If this meeting with Mr. Champagne hadn't had any impact, and people hadn't benefited in any way, is it because the minister was not very convincing or because he didn't have the authority to compel you?

[Eric La Flèche]

With respect to the meeting with the minister, Mr. Champagne, we understand his intentions. Everyone is affected by the rising price of food. The government has spoken to the major players in the industry about how prices might be stabilized.

When I was at that meeting, I made two commitments. I said that we were working hard every day to keep prices as low as possible in all our stores and for all our corporate banners, and also to keep inflation as low and as stable as possible, in addition to providing our customers with the best possible bargains. We were doing that before the meeting and we are still doing it now.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

So the meeting didn't have any impact. You work hard every day to keep prices as low as possible to the best of your ability.

[Eric La Flèche]

I didn't say that.