New tariffs could eventually raise food prices, Empire CEO says

Upcoming tariffs on some American food products could eventually mean higher prices for Canadian consumers, says the chief executive of Empire Co. Ltd.

The Canadian government announced it would impose retaliatory tariffs on July 1 on a wide range of American products in response to U.S. tariffs on some Canadian steel and aluminum products. The Canadian government targeted yogurt, coffee, maple sugar, cucumbers, salad dressing and other food items.

“Our position at the outset is we’d rather not see our consumers and our customers pay more,” said Michael Medline, who is also the CEO of Empire subsidiary Sobeys Inc., during a conference call with analysts.

“So our first response as manufacturers attempt to push their tariff cost increases to us would be to resist them and not accept them.”

He said in an interview afterwards that the company has heard from a small number of supply partners, who have already tried to pass on those cost increases. Empire has said no, he said, adding it seems a little early to be passing that on.

Some of Empire’s suppliers are considering that possibility though.

Av Maharaj, the vice-president of corporate and legal affairs at Kraft Heinz Canada, said “all options are on the table” as the company figures out how much of an impact retaliatory tariffs could have on its products.

For now, Maharaj said it is too early to tell whether Kraft Heinz will have to pass costs on to consumers or grocery stores, but said having the company stomach the tariffs would be difficult.

Medline said if suppliers insist on increasing prices and Empire’s stores must continue carrying the product due to demand, that cost increase would be reflected in the retail price.