Stocksak: Canadian watchdog examines the impact of competition upon soaring food prices

© Stocksak. FILE PHOTO – The price of peppers in the Northmart grocery store, Iqaluit (Nunavut), Canada, July 28, 2022. REUTERS/Carlos Osorio

(Stocksak). Canada’s competition watchdog announced Monday that it will examine factors that contribute to the soaring prices of food and whether increased competition in the grocery sector could lower Canadians’ costs.

Statistics Canada reported that prices for store-bought food have outpaced the broader annual inflation rate over the past 10 months. In September, they grew 11.4%, the fastest pace since over forty years.

“Canadian consumers have seen their purchasing power decrease with rising inflation,” the Competition Bureau Canada stated. This is especially true when shopping for groceries,” said the Competition Bureau Canada in a statement.

Canada’s opposition New Democrats Party, (NDP), has a deal to keep Prime minister Justin Trudeau’s minority government in power until 2025. It has been calling out grocery chain owners for high food costs.

Last week, the Canadian parliament supported a NDP proposal asking for tougher penalties for price fixing and stronger competition laws.

The Competition Bureau stated it would examine whether competition factors were impacting food prices, on top of other factors like Russia’s invasion in Ukraine and supply chain disruptions. However it was not investigating specific allegations.

The results of the study will be available in June.

The watchdog stated that the grocery industry is complex and it may not have enough information in order to draw any firm conclusions. However, it expects to recommend steps governments can take to improve competition.

Loblaw Cos Ltd, a Grocery Chain operator, reported a quarterly loss of C$387million ($282.4 million) on C$12.85billion revenue in July. Last week, it said that it would freeze prices of 1,500 no-name products up to the end of January.

($1 = 1.3705 Canadian dollars)

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