The Competition Bureau has commenced an investigation into the use of minimum advertised pricing policies within the grocery sector, given that Canadians may not know that stores cannot always advertise their lowest prices in flyers, apps, or online promotions.
“Canadians expect grocery stores to be able to advertise their best deals,” said Jeanne Pratt, interim competition commissioner, in the news release announcing the investigation. “We’re concerned that policies that prevent this make it harder for grocers to compete, and for consumers to access lower prices.”
The Competition Bureau is looking into whether such policies:
- Make it more difficult for consumers to find deals
- Restrict price competition
- Result in barriers for discount and new grocers
- Make it easier for grocers to coordinate the prices charged
Call for input
As part of its investigation, the Competition Bureau called on consumers, retailers, suppliers, and others with relevant experience to reach out with their insights into how minimum advertised pricing policies affect grocery prices.
According to the Competition Bureau, the feedback it receives will influence its examination of competition across the country’s food supply chain.
“At a time when food affordability remains an important concern for Canadians, we want to hear about how these policies are affecting grocery prices and consumer choice,” Pratt said in the news release.
More on minimum advertised pricing policies
The Competition Bureau explained that suppliers can set minimum advertised pricing policies and that suppliers and retailers can also negotiate these policies, which fix the lowest price at which a retailer can advertise a product.
According to the Competition Bureau, in the retail grocery industry and similar industries in which a few big companies dominate the market, such policies can make it challenging for discount grocers and other retailers to advertise lower prices and remain competitive, even when they are ready to offer those lower prices in their stores.
The Competition Bureau added that some retailers instead opt to remove in-store discounts altogether because they cannot offer lower prices.
A retail grocery market study by the Competition Bureau revealed that increased competition within the industry would help bring down prices and increase choice and innovation for the benefit of Canadian consumers.
More Competition Bureau news
Here are some other recent news stories involving the Competition Bureau.
In July, the Competition Bureau opened a public consultation and urged Canadians to provide input on its proposed cartel enforcement guidelines relating to illegal business agreements.
In June, the Competition Bureau announced an examination into competition across the country’s food supply chain.
In April, the Competition Bureau cautioned businesses that entering into illegal agreements in connection with public contracts, including bid‑rigging and price‑fixing agreements, could expose them to criminal charges, substantial fines, and reputational harm.
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