Provinces have a key role in stopping grocery chains from gouging farmers and other suppliers

  • National Newswatch

Ottawa—The federal government will encourage the provinces to deal with excessive fees imposed by grocery store chains on farm and processed food products, says Neil Ellis, the Parliamentary secretary for agriculture.Responding to Lianne Rood, the Conservative agriculture critic, Ellis said in the Commons that contracts between agrifood suppliers and buyers come under provincial jurisdiction and Agriculture Minister Marie-Claude Bibeau is discussing the issue with her provincial counterparts.“It is disappointing to see grocery stores imposing these costly fees that fall on Canadian producers, who are working hard to feed Canadians,” said Ellis.Rood said while the five major grocery chains are making a windfall from increased grocery sales due to the pandemic, they continue to hit farmers and processors with higher fees.“Loblaw, Walmart and Metro want to gouge farmers and processors,” she said. “Loblaws saw record third-quarter profits of about $400 million. Metro's fourth-quarter profits were up 11.4 per cent. However, they want farmers and processors to pay for store expansions while groceries for families from Streetsville, Pointe-au-Baril and across Canada get more expensive.”The Commons agriculture committee has launched a study into food processing capacity into Canada. In a presentation to the MPs, Michael Graydon, President of Food, Health and Consumer Products of Canada, said five retailers control more than 80 per cent of the consumer food purchases. “These retailers have adopted unfair and unethical business practices not seen or accepted in any other sector and have remained unchecked due to their power over suppliers.”Walmart Canada and Loblaw increased fees charged to suppliers to pay for the retailers' infrastructure costs, he said. “These practices cost suppliers $6 billion on an annual basis, inflating retailer profitability, with no return on investment or growth for suppliers, no value in reduced prices or innovation for consumers.”The ongoing sustainability and growth of farmers and food processors requires changes to the current business environment, he said. One possibility is a U.K.-style developed by the federal and provincial governments to achieve national consistency.“Consolidation in the retail grocery sector has resulted in a significant imbalance of power between a handful of large retailers and their suppliers,” he said. This has led to commercially unfair behaviours that threaten food manufacturing and “also negatively impact smaller grocery retailers, in that suppliers may alter how they do business with smaller retailers to avoid or reduce the risk of incurring significant financial penalties from the large retailers.”Consumers end up with fewer, less innovative and more expensive products, he said. “For manufacturers: the retail practices and resulting costs to business make Canada an unattractive country for innovation, investment, and job creation. Smaller manufacturers cannot afford to expand and larger, global, companies are choosing to invest elsewhere.”While changes to the federal Competition Act may be helpful in addressing some issues, they “are not a substitute for a code of conduct, which addresses key issues proactively, rather than through a lengthy, reactive enforcement process.”Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.

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