The Competition Bureau has launched an investigation into minimum advertised pricing policies used across Canada’s grocery sector, saying the practice may prevent stores from advertising their lowest prices in flyers, apps and online promotions.
Interim competition commissioner Jeanne Pratt said Canadians expect grocery stores to be able to advertise their best deals. She said the bureau is concerned that policies preventing this make it harder for grocers to compete and for consumers to access lower prices.
What the Bureau Is Examining
The investigation is looking at whether minimum advertised pricing policies make it more difficult for consumers to find deals, restrict price competition, create barriers for discount and new grocers, and make it easier for grocers to coordinate the prices they charge.
The bureau explained that suppliers can set these policies on their own, or negotiate them with retailers, effectively fixing the lowest price at which a retailer can advertise a product. In an industry such as grocery retail, where a small number of large companies dominate the market, the bureau said such policies can make it difficult for discount grocers and other retailers to advertise lower prices and stay competitive, even when they are willing to sell at those lower prices in store. The bureau also noted that some retailers choose to drop in-store discounts entirely rather than operate under these restrictions.
Bureau Seeks Public Input
As part of the investigation, the Competition Bureau is asking consumers, retailers, suppliers and others with relevant experience to share their insights on how minimum advertised pricing policies affect grocery prices. Pratt said that with food affordability remaining a significant concern for Canadians, the bureau wants to understand how these policies affect pricing and consumer choice.
The bureau said the feedback collected will inform its broader examination of competition across Canada’s food supply chain. A previous retail grocery market study conducted by the bureau found that increased competition in the industry would help lower prices and improve choice and innovation for consumers.
Part of Broader Enforcement Activity
The grocery pricing investigation follows other recent actions by the Competition Bureau. In July, the bureau opened a public consultation on proposed cartel enforcement guidelines concerning illegal business agreements. In June, it announced a broader examination of competition across the food supply chain. In April, the bureau warned businesses that entering illegal agreements tied to public contracts, including bid-rigging and price-fixing, could lead to criminal charges, substantial fines and reputational harm.
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