Civil probe dropped over Loblaw policies for suppliers

TORONTO Canada’s competition watchdog has closed a 3½-year civil investigation into Loblaw Companies Ltd. related to allegations it abused its dominant position in dealing with its suppliers and determined no further action is warranted.

The Competition Bureau said Tuesday that after analyzing the impact of Loblaw’s supplier policies on competition, it concluded there wasn’t sufficient evidence to support allegations that Canada’s largest grocer abused its dominant position.

The civil investigation — which is separate from the bureau’s criminal investigation into the grocery industry — centred on whether Loblaw had influenced its suppliers’ dealings with other customers by seeking compensation when other retailers sold their products at lower prices.

The bureau said it began the civil investigation in March 2014, shortly after a review of Loblaw’s acquisition of Shoppers Drug Mart Corp., which was Canada’s largest pharmacy chain at the time.

“The Bureau has gathered the facts and developed a deep understanding of the complex issues in the grocery industry: we have followed through on our commitment to conduct a thorough review,” Commissioner of Competition John Pecman said Tuesday in a statement. “The line between hard bargaining and anti-competitive conduct is a fine one and firms should be careful not to cross it. The position statement we issued today in connection to this civil investigation provides guidance to the grocery industry on how to stay onside of Canada’s competition law.”

The bureau said that its civil investigation of Loblaw focused on nine policies that were discontinued in January 2016. It added that it could revisit its decision if further information comes to its attention.

Loblaw said the announcement is welcome news.

“We have been an open book and made significant contributions to the bureau’s review. We have used the process to better understand the bureau’s concerns and observations, and have simplified the way we conduct our business with suppliers,” said spokesman Kevin Groh.

“We are continuing to introduce industry-leading compliance measures.”