Federal NDP Leader Jagmeet Singh is calling for a parliamentary committee to investigate soaring profits posted at grocery stores, insinuating that corporate greed or worse is inflating the already rising costs of food.
Singh said Tuesday that a probe is needed to uncover the root cause of corporate profits and CEO bonuses in the food and grocery sector.
He pointed to soaring food prices as other sources of inflation cooled as a sign of artificially high grocery bills.
Statistics Canada reported earlier this month that while the annual rate of inflation cooled to seven per cent nationally in August, the cost of food skyrocketed 10.8 per cent — a new 41-year high.
“We know that this is an area where families are really feeling the squeeze and it’s the one area where the prices have not started to come down,” Singh said Tuesday.
Food prices have been on the rise for much of 2022, with many economists pointing to the war in Ukraine stymying supply chains on wheat and other staples as a chief cause of inflation.
But Singh argued that if high prices were solely caused by international factors, grocery stores would not be simultaneously posting robust quarterly profits.
Metro said last month that its $275-million profit in Q3 was roughly nine per cent higher than last year; Loblaw, meanwhile, reported a Q2 profit of $387 million in July, up 3.2 per cent annually; and in June Empire Co. Ltd., parent of Sobeys, reported a Q4 profit of $178.5 million, up 3.8 per cent year over year.
“If it was simply an increase of price to match the increased costs, we wouldn’t be seeing the bonuses and the record profits. So that is clear evidence that it’s something beyond the understandable, perhaps, increased costs that flow from the war or gas prices that have gone up,” Singh said.
He alluded to the 2018 Competition Bureau inquiry that found Canadian grocers co-ordinated to fix the price of bread as proof that the industry has engaged in unscrupulous practices before.
A report earlier this month from the Agri-Food Analytics Lab at Dalhousie University also looked into allegations of corporate profiteering by Canada’s grocery giants.
The report compared the year-end profit margins of Loblaw, Metro and Empire Co. over the past four years and found they stayed “relatively consistent,” leaving little public evidence of so-called “greedflation.”
“It may look counterintuitive, but the numbers are not pointing to commercial abuse towards consumers,” the report says.
While each of the three grocery giants reported a jump in both profit and revenues in their latest quarterly results, each pointed to increased sales in their pharmacy businesses as driving the higher earnings.
The Dalhousie report did, however, say an investigation from the Competition Bureau could “shed more light on practices in the industry.”
Publicly available data in earnings reports is “inconclusive at best,” the report concluded, with little information available on the impact of food processing, transportation and affiliated companies on costs and profit margins in the grocery industry.
NDP MP Alistair MacGregor plans to introduce the motion calling for a probe at the agriculture committee on Wednesday.
Speaking with Global News on Tuesday, MacGregor pointed to increasing concentration in the food processing and grocery sectors as limiting competition and choice for consumers. He said a probe would seek to touch on the role of corporate concentration in food pricing.
He said his constituents in Duncan, B.C. have also told him they’re increasingly being forced to shop in the centre aisles of the grocery store — the shelves lined with processed but typically cheaper foods — because they can’t afford the fresh fruits, vegetables and quality meat found on the outer edge of the store.
“Too many Canadian families are experiencing this pain,” he said.
“I just want parliamentarians to wake up to this fact and to really delve into it, to make sure we’re coming up with concrete solutions to address it.”
— with files from Global News’ Bryan Mullan, Sean Boynton
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