Star’s view

The burden on consumers,

So some of Canada’s biggest grocers and bakers profess to be shocked, shocked! to discover that there’s been price-fixing going on right under their noses, for 14 years no less.

The CEO of Loblaw Cos. Ltd. and George Weston Ltd. (who happens to be the same man, Galen G. Weston) says the companies found out only in 2015 that they had been taking part in a scheme to increase the price of packaged bread starting back in 2001.

How all this continued for a decade and a half without the knowledge of the men (or man) at the top remains unexplained. But Weston assured consumers this week that “this sort of behaviour is wrong and has no place in our business.”

Loblaws and Weston bakeries provided information on the scheme to the federal Competition Bureau, and so will avoid a criminal charge. Other big actors in the industry — including Metro, Sobeys, Canada Bread and Wal-Mart — are also co-operating with the bureau’s investigation.

Consumers will rightly feel outraged at all this. The idea that the biggest grocers and bakers in the country would collude to raise the price of one of the most basic food staples is repellent.

It’s a scheme that clearly penalized lower-income people more than others, given that supermarket bread forms a relatively bigger part of their budget. Fattening your bottom line on the backs of poor people isn’t a good look for some of Canada’s biggest corporations.

But keep the outrage in proportion. Loblaw (a $46-billion company by annual revenue) promises to reimburse affected consumers with gift cards worth $25. It estimates that will cost the company between $75 million and $150 million.

Compare that to how much consumers are penalized through the absolutely legal, indeed highly valued, practice of supply management. For decades now, prices of dairy and poultry products have been kept artificially high in Canada as a result of policies endorsed by all three major political parties and fiercely defended by the industries in question.

This costs the average Canadian consumer a lot. In 2014, the Conference Board of Canada estimated that higher prices for dairy products (milk, cheese, yogurt and so on) alone cost the average family $276 a year.

Another study in the journal Canadian Public Policy put the cost of all supply management policies at an average of $444 per family per year. That adds up to an awful lot. The OECD at one point estimated that supply management cost Canadian consumers a staggering $2.6 billion a year.

All these figures, of course, are sharply contested by the dairy and poultry industries, which profit hugely from existing policies. And it’s perfectly reasonable to defend supply management if you value keeping dairy and poultry farmers prosperous and stable and don’t mind putting the cost of that onto consumers.

Others argue that Canada should value “food security” over having the lowest possible consumer prices. And, even with supply management in place, food is cheaper in this country relative to average earnings than almost anywhere else in the world.

What’s harder to argue is that collusion on the price of some bread products on a scale that can be compensated for by a $25 gift card merits special public outrage while official policy dictates that Canadian consumers must pay far, far more than they need to for other basic foodstuffs.

To be clear, price-fixing on bread is illegal and wrong. But anyone angered by those revelations should bottle that feeling and direct it where it would count a lot more: against Canada’s consumer-unfriendly policies that hike the prices families must pay for milk, cheese, chicken and eggs.

Anyone angered by price-fixing on bread should focus on Canadian policies that hike the prices of milk, cheese, chicken and eggs