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Ottawa should be making it easier for international grocers to set up shop here and for independent businesses to compete against the grocery giants.

When it comes to lowering high grocery prices, Canadians know what to do. So does the Competition Bureau. Both understand that the solution to rising prices involves increasing competition through policy reform.

Unfortunately, though, our attention is currently diverted toward parliamentary wrangling with CEOs. So we’ve watched grocery industry executives appear before Parliament to explain themselves, only to have them clam up when things cut too close to the bone.

Now it’s going to happen again. Dissatisfied with the March madness, the committee intends to have another kick at the can. And this time, it wants details, specifically about the grocer’s plans to stabilize grocery prices.

Those details were due in writing. The CEOs will also be back for another round of questioning about those plans in the near future, though they’re not likely to offer any more fulsome responses than they did in round one.

Execs will likely demur if asked for confidential information and for good reason. Forcing companies to reveal their business plans isn’t exactly a recipe for increasing competition, which is exactly what the grocery industry needs.

Consumers also expressed concerns about large grocers gobbling up smaller ones, and about “shrinkflation”— the duplicitous practice of grocers reducing package size, but maintaining the same price.

Not-so-coincidentally, the bureau echoed Canadians’ concerns in a report released in June. Among its main recommendations, it advised governments to adopt policies that make it easier for international grocers to set up shop here, and for independent businesses to compete against the grocery giants.

The bureau also recommended the provinces limit property controls, which allow grocery giants to restrict real estate leasing to competitors, thereby reducing competition. And in an effort to eliminate shrinkflation, the bureau advised governments to consider harmonized unit pricing, which would require grocers to display the price of a product based on standard package size.

Finally, in response to Canadians’ concerns about large grocers swallowing smaller ones, the bureau noted the Competition Act limits its ability to intervene in mergers.

It expressed the same concern in a March report on competition policy, noting that “the Act’s merger review framework is weak,” and it therefore recommended legislative changes that would allow for greater premerger disclosure, including oral examinations under oath.

Which brings us back to our famously taciturn CEOs. It seems they’re not just tight-lipped when testifying before Parliament; in the March report, the bureau lamented its limited ability to compel information for purposes of producing market studies.
Sparring with bobbing and weaving CEOs won’t change that, however. Instead, the bureau recommended that it be granted formal market study powers, including the ability to compel production of relevant information.

The Organization for Economic Development and Co-operation made a similar recommendation in 2016, saying it could “enhance transparency and openness in the policy-making process,” which is precisely what Canadians want.

Much like all of the bureau’s — and Canadians’ — recommendations, that will require, not more fruitless exchanges with CEOs, but fruitful policy change, at both the federal and provincial levels.

And as the bureau said in March, “now is the time … to put into place a more effective competition policy, one that works for all Canadians.”

source: https://www.thespec.com/opinion/editorials/canada-needs-a-fruitful-grocery-policy-that-benefits-all-canadians/article_e12539ab-14f0-5b3c-8ac1-d885b92c548b.html