Investigation to provide answers about 'greedflation' from grocery giants, Northern Ontario MP says
Timmins-James Bay MP Charlie Angus says he's concerned about price gouging
It's high time for a price check at the major grocery chains in Canada, according to the New Democrats.
The federal agriculture committee recently passed a motion which will prompt an investigation into grocery store profits. The heads of the large grocery chains will have to appear before the Parliamentary Standing Committee on Agriculture.
Timmins-James Bay MP Charlie Angus said the government can ask key questions to find out if profiteering is taking place.
"There's a lot of talk about how things are really really good right now in the grocery biz because of that extra level of profit," he said.
In its most recently completed quarter, Loblaw revealed net earnings of $387 million. That's up $12 million from the same time last year, and by $121 million from the same period in 2019, prior to the pandemic.
Grocery giants Metro and Empire Co. — which owns Sobeys and other chains — have also seen an increase in profits compared with before the pandemic, though Empire Co.'s profits did dip slightly in the most recent quarter.
"So they were bragging to their investors that they were making record profits yet they were telling people at the grocery store, sorry [the cost of food] has jumped so much, it's because of inflation," Angus said.
He calls it "greedflation."
"That extra level of profit shouldn't be coming from economic insecurity at a time of inflation and that's the issue that we need to address here."
Angus said since the topic has been raised in parliament he and other MPs have been hearing from those in the grocery business.
"[Franchise owners] recognize that what's happening is not in the norm for the business," he said.
"They know what their margins are, they know where their level of profits are and they have been saying they're very very concerned that there is serious price gouging going on."
Angus admits it might be harder to get larger franchise owners to testify, but he's hopeful some evidence will be admitted into the record.
"It's about fairness to people. People are just making do right now, there's a lot of insecurity. The last thing we want is a senior citizen or a young mom not being able to buy stuff because someone is bragging about … profits," he said.
"That's coming out of our pocketbooks, and I think we can do better at this time."
Investigation will be helpful
Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University, welcomes the investigation.
"It will help politicians and the Canadian public to get more educated about how food distribution actually works," he said
However Charlebois believes grocers aren't raking in as much as politicians seem to think, adding that even though overall revenue has increased, profit margins have been relatively consistent.
"Over the last five years, all grocers have posted profits that really fit within that frame between two to four per cent," Charlebois said.
With files from Kate Rutherford