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Grocery bosses pledge help addressing skyrocketing food prices

Grocery CEOs meet with Canada’s federal ministers, agree to work to stabilize food prices

Top executives from Canada’s major grocery chains have agreed to work with the federal government on stabilizing prices, Industry Minister François-Philippe Champagne said on Monday, but few details have been divulged about how that will be achieved.

Champagne and Finance Minister Chrystia Freeland met with executives from Loblaw, Metro, Empire, Walmart and Costco on Monday morning.

“They have agreed to support the government of Canada in our efforts to stabilize food prices in Canada,” Champagne told reporters after the meeting.

Calling the meetings historic and constructive, the industry minister said he told the grocery CEOs “in no uncertain terms” that Canadians expect them to take action.

Prime Minister Justin Trudeau announced last week that Ottawa is asking major Canadian grocers to come up with a plan by Thanksgiving to stabilize prices. Trudeau warned that if the plan is not good enough, the federal government will take further action — and it is not ruling anything out, including tax measures.

Speaking to reporters Monday afternoon, Trudeau reiterated the federal government is going to make sure the major grocers have a plan.

“Food is too expensive for too many families and (grocers are) making record profits,” Trudeau said.

However, the Liberals haven’t indicated what they would like to see the grocers do or how these chains could bring stability to grocery prices.

Instead, Champagne said in French that he wants the grocers to come up with their own individual plans, so as to protect competition.

“Now you want to let them compete against each other so Canadians can see the benefits of competition,” he said.

Champagne is expected to meet with other segments of the food industry as well to talk about rapidly rising prices.

Canada’s largest grocers have been under intense scrutiny as prices continue to skyrocket while some of them reap ballooning profits.

Grocery prices rose 8.5 per cent year-over-year in July, showing a slight easing of price growth but still running much hotter than overall inflation at 3.3 per cent.

But the industry has pushed back on the idea that they’re to blame for high grocery prices.

The Retail Council of Canada said in a statement last week that grocer prices profits have nothing to do with the rising cost of food, pointing instead to higher costs being passed on from food manufacturers and producers.

Empire CEO Michael Medline told reporters on Monday afternoon the meeting was “very productive,” but did not answer questions about whether it will actually lead to lower prices.

Nor would Metro CEO Eric La Flèche.

“We’re all committed to finding solutions to stabilize prices and bring down the (consumer price index) on the food side,” he said, calling high prices an “industry issue.”

When pressed by reporters about whether prices will come down, La Flèche said “prices fluctuate every week in our industry,” and noted that the discussions were about consumer packaged goods rather than fresh foods such as produce, dairy and meat.

The other three executives in attendance did not stop to speak with reporters after the meeting.

With affordability concerns top-of-mind for Canadians, the Liberals are looking outside the border for potential solutions to rising grocery prices.

During his news conference, Champagne noted that food inflation is a global issue, and that the government is speaking with its French and British counterparts about how to respond.

The French government reached a three-month agreement with supermarket chains for them to cut prices on hundreds of staples and other foods, which is expected to be extended through the summer. Britain — where food inflation has reached 45-year highs — is discussing a similar move.

Other European countries have mandated price controls for staple foods.

“We’ve been following what Carrefour has been doing in France, and even shaming in public those who don’t want to be part of the solution,” said Champagne, adding that if CEOs don’t want to co-operate, he will take his message to the grocers’ boards.

The federal government is also pursuing changes to the Competition Act that would strengthen the Competition Bureau and give it the power to take action on corporations that work together to stifle consumer choice — specifically citing large grocery stores that have prevented competitors from setting up shop nearby.