Ottawa is creating a “Grocery Task Force” to oversee and probe industry practices like “shrinkflation” as Canadians grapple with the cost of food — but how might it work?
The task force was one of five measures announced by Industry Minister Francois-Philippe Champagne Thursday in a bid to stabilize food prices.
Champagne had promised action by Thanksgiving long weekend by the country’s big grocery chains as his government sees a slide in the polls with Conservatives gaining as they drill in on affordability issues.
But what is “shrinkflation” and what do we know about how the task force could work?
What is the task force?
The Grocery Task Force will be a form of consumer advocacy team that will be created out of the Office of Consumer Affairs, which operates out of Innovation, Science and Economic Development Canada.
The team will focus on the retail sector, the government said in a news release Thursday.
Its priorities will be to monitor grocers’ commitments to Ottawa on a monthly basis, and actions taken by other key players in the food industry, including manufacturers.
It will also investigate and uncover practices that hurt consumers, such as “shrinkflation.”
“We have nobody today in Canada, as part of government, which was really looking at these things to inform consumers,” Champagne said.
“The third thing we’re going to do is to monitor the pricing practice of international manufacturers. We didn’t do that before.”
What is shrinkflation?
Shrinkflation is a practice that has been making headlines as of late. It is when producers make a product smaller, but keep the price the same.
The issue is of growing concern to Canadians. In April, an Ipsos poll conducted for Global News found 84 per cent of respondents were concerned about shrinkflation.
“They pick up a box at the grocery store and they go, ‘Didn’t this used to be bigger?’” Ipsos senior vice-president Sean Simpson told Global News at the time.
“They’re noticing that those portion sizes are declining and they’re concerned that that trend could continue.”
Shrinkflation is an added element to high grocery prices, which have been a major pain point for Canadians as of late. Grocery price inflation slowed recently to 6.9 per cent in August, down from 8.5 per cent in July, 9.1 per cent in June and 11 per cent last fall.
In June, MPs on the House of Commons agriculture and agri-food committee, which studied food inflation, said in a report that to help address shrinkflation, Ottawa should adopt a standardized approach for unit pricing to help Canadians make “informed decisions” at the grocery store.
Is the task force needed?
The government has yet to respond to the committee’s report, but regardless, the creation of the task force is a “good idea,” said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University.
Charlebois was in attendance when the heads of the big grocers met in Ottawa last month in response to Ottawa’s call to stabilize prices.
Shrinkflation aside, the task force can also probe other elements like “skimpflation” — the practice of reducing the quality of products while continuing to market them at the same price, Charlebois said.
“That’s been a challenge as well for consumers. They’ve noticed that there’s more water in products, and so industry is responding to market needs, market wants. There’s been a lot of reformulated products out there, and there’s going to be more of them,” he said.
“I actually think it’s a good idea to provide some oversight for some of these things.”
Michael von Massow, a professor of food economics at the University of Guelph, agreed with Charlebois, but said the “problem is that if you start now, you don’t have a baseline.”
“If you look at what grocers are doing with respect to specials, price freezes, it’s very hard for them to evaluate because they have nothing to compare it to,” he said.
“If they start tracking information now and do a good job of investigating where things are at, we can look at what’s happened going forward. But it’s very difficult for us to say by Christmas, for example, that this has made, that what the grocers have done, has made a difference because we have nothing to compare it to.”
The Canadian Produce Marketing Association (CPMA) – a non-profit that represents multiple members within produce industry – said in a statement Friday more information is required to determine the value of the task force.
“CPMA recognizes the efforts of existing groups within the Canadian marketplace supporting consumer interests,” it said.
“Duplication of these efforts and adding more costs to a burdened supply chain must be considered before institutionalizing a new structure.”
Ottawa has ‘unfinished business’
Task force aside, Champagne said he’s received initial commitments by Canada’s top five grocers, which will see them provide “aggressive” discounts across a basket of key food products, price freezes and price-matching campaigns.
He also said Ottawa will push to create a grocery code of conduct that it says will support fairness and transparency across the industry, and will improve the accessibility and availability of data on food prices.
Finally, Champagne promised to modernize the legislative framework of the Competition Act, which is already proposed in Bill C-56.
“For the longer term, I actually think that Mr. Champagne’s road map makes sense. We need a stronger Competition Bureau. We need a code of conduct, obviously. We need data, too,” Charlebois said.
“But if you’re a consumer struggling with your food bills, there’s not much for you right now. Over the short term, what we heard yesterday was basically business as usual.”
Charlebois emphasized the need to “democratize data.” Data, he said, is expensive and is not available to many in the industry. Those who can afford it can see what’s going on and have an “edge” over others, he said, which is resulting in “not a level playing field.”
Furthermore, he called it a “missed opportunity” that a grocery code of conduct wasn’t formally announced Thursday, but said Ottawa’s announcement is just the beginning.
“The adoption of the code and the implementation of the code should be accelerated,” Charlebois said.
“I actually think that there is some unfinished business here for the minister and Ottawa.”