Pri­ce fi­xing scan­dal brea­king bad for gro­cers

La Jornada (Canada) - - PORTADA -

Ca­na­da’s Com­pe­ti­tion Bu­reau is alle­ging that al­most every ma­jor food pla­yer was in on the bread car­tel. This is ex­tra­or­di­na­rily dis­tur­bing and Ca­na­dians ha­ve every right to won­der if ot­her gro­cery sta­ples are af­fec­ted by this ty­pe of co­llu­sion.

The bread-pri­ce-fi­xing sche­me, which alle­gedly las­ted for 14 years, in­clu­ded ma­jor who­le­sa­lers such as Ca­na­da Bread Co. Ltd., Geor­ge Wes­ton Ltd., and the ma­jor gro­cers Lo­blaw, Wal­mart Ca­na­da, So­beys, Me­tro and Giant Ti­ger.

At who­le­sa­le, this re­pre­sents most of the ba­ked goods sold to Ca­na­dians. At re­tail, the com­pa­nies in­vol­ved re­pre­sent 80 per cent of all foods sold di­rectly to con­su­mers. This is mas­si­ve. The bu­reau is sug­ges­ting that all the­se com­pa­nies bro­ke the law by co­llu­ding at both the who­le­sa­le and re­tail le­vels in locks­tep. And that ap­pa­rently meant re­tail pri­ces we­re in­fla­ted.

We can only ima­gi­ne that the tem­pta­tion was overw­hel­ming. Even though the­se ca­ses are cha­llen­ging to un­co­ver, we’ve seen such in­ci­dents in the past. This ti­me, ho­we­ver, the bu­reau alle­ges that the sche­me was double-la­ye­red. Both ma­nu­fac­tu­ring and re­tai­ling we­re ap­pa­rently hea­vily in­vol­ved, with co-or­di­na­ted pri­ce stra­te­gies to ma­na­ge mar­gins and in­crea­se pro­fits.

Both So­beys and Me­tro re­jec­ted ac­cu­sa­tions of being part of ille­gal ac­ti­vi­ties - in fact, one day be­fo­re the bu­reau’s re­port ca­me out, Me­tro’s chief exe­cu­ti­ve of­fi­cer said his com­pany wasn’t in­vol­ved.

It will be in­ter­es­ting to see what ac­tion the­se com­pa­nies ta­ke now. In De­cem­ber, when Lo­blaw alo­ne was im­pli­ca­ted, it res­pon­ded with a $25 gift-cer­ti­fi­ca­te cam­paign, which is still going strong. Sa­ve-On-Foods in­tro­dued a si­mi­lar stra­tegy days after Lo­blaw. Gi­ven that we knew little about the in­ves­ti­ga­tion at the ti­me, Lo­blaw’s gi­vea­way ser­ved as a dis­trac­tion; it was the only thing that most peo­ple we­re tal­king about.

But gi­ven what we know now, this must chan­ge. The Com­pe­ti­tion Bu­reau’s alle­ga­tions put the spotlight clearly on con­su­mer trust. Many shop­pers may soon for­get about the con­tro­versy. But ot­hers ha­ve li­mi­ted means and be­lie­ve, at the very least, that they deser­ve an in­dustry that ope­ra­tes with in­te­grity. As a re­sult, con­su­mers should ex­pect chan­ges.

In fact, gro­cers ha­ve al­ready star­ted to im­ple­ment chan­ges. Sin­ce the news first bro­ke in De­cem­ber, countless food re­tai­lers ha­ve been of­fe­ring at­trac­ti­ve dis­counts on bread and ba­ked goods. Across the country, gro­cers ha­ve al­so pla­ced carts of the­se dis­coun­ted items in front of their sto­res to catch the at­ten­tion of en­te­ri­ng shop­pers.

This is one overt way for the in­dustry to of­fer so­met­hing of an apo­logy. But re­tai­lers should con­si­der doing mo­re.

Gift cer­ti­fi­ca­tes, which don’t dis­cri­mi­na­te, are al­ways wel­co­me. They help tho­se who need the ex­tra cash to eat; ot­hers can gi­ve them to cha­rity. The­re are po­ten­tial ad­van­ta­ges for the com­pa­nies, as long as the in­ten­tion is ge­nui­ne. Lo­blaw’s mea cul­pa and $25 gift cer­ti­fi­ca­te ca­me all at on­ce. Gi­ven the con­fu­sion about the scan­dal at that point, this li­kely wor­ked to the com­pany’s ad­van­ta­ge. Ot­her gro­cers now fa­ce a dif­fe­rent group of con­su­mers, who are much mo­re in­for­med and per­haps less to­le­rant.

Lo­blaw wai­ted 14 years to try to ma­ke amends. The ot­hers wai­ted 14 years, 42 days and coun­ting - and they ha­ve to ex­plain the­se ad­di­tio­nal days of de­lay.

The who­le thing is a pu­blic-re­la­tions mess and at­tem­pting to show plau­si­ble de­nia­bi­lity may not the best op­tion.

So­me in­ven­ti­ve so­lu­tions could cer­tainly help the in­dustry. Gi­ving away mo­ney is al­ways po­pu­lar. But the be­tra­yal many Ca­na­dians feel should be the fo­cus of any new cam­paigns. Re­gard­less who was in­vol­ved or awa­re of the alle­ged scam, con­su­mers should be the fo­cal point now. -TROYMEDIA

Syl­vain Char­le­bois is Se­nior Fe­llow with the Atlan­tic Ins­ti­tu­te for Mar­ket Stu­dies, dean of the Fa­culty of Ma­na­ge­ment and a pro­fes­sor in the Fa­culty of Agri­cul­tu­re at Dal­hou­sie Uni­ver­sity, and aut­hor of Food Sa­fety, Risk In­te­lli­gen­ce and Bench­mar­king, pu­blis­hed by Wi­ley-Black­well (2017).

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