Created on 11/23/2017 10:32:10 AM
TORONTO - Food & Consumer Products of Canada (FCPC) and its member companies remain concerned that industry’s ability to provide value to consumers and jobs to Canadian workers will be compromised, following today’s announcement by the Competition Bureau to end its investigation into allegations of abuse of dominance by Loblaw.
FCPC believes that today’s announcement highlights a significant gap within the Competition Act when applied against the challenges facing grocery suppliers within Canada’s consolidated retail environment. Consolidation has resulted in effectively five key players controlling 80% of the grocery industry. With limited venues through which to sell their products to Canadians, this imbalance means certain retailers can make demands and impose arbitrary levies, because their suppliers, manufacturers and distributors have no choice but to continue to work with them if they want to maintain a viable Canadian business.
“The Bureau has specifically pointed out that the Act does not apply to unconscionable conduct or the imbalance of power that is negatively impacting suppliers within our concentrated market,” explains Michael Graydon, FCPC CEO. “This is the single biggest issue from our perspective.”
Graydon notes the announcement also illustrates the urgent need for retailers and suppliers to develop a model that ensures industry sustainability while supporting consumer variety, price and availability. A fair business principles framework model has worked well in markets with similar imbalances like the U.K and Australia as a way of achieving fairness, sustainability and healthy market competition. Australia in particular has an unconscionable practice provision as well as a number of options for resolving disputes. A similar framework in Canada may reduce the likelihood or need for further industry investigations into trade relations.
It is important that Canadians understand that certain retailer behaviours are negatively impacting manufacturers’ ability to compete and grow, with direct implications on jobs and innovation,” Graydon explains. In a low-growth grocery environment, suppliers have limited options when responding to grocery demands: either reduce promotional spending that benefits consumers with lower prices, or cut back on jobs to improve operational efficiencies. Under this environment, the capital investments, crucial to future growth simply aren’t happening, further eroding Canada’s manufacturing competitiveness.
Food & Consumer Products of Canada is Canada’s largest industry association representing the companies that manufacture and distribute the vast majority of food, beverage and consumer goods found on grocery store shelves. FCPC members provide jobs to almost 300,000 Canadians and include small and large multinational and Canadian owned companies.
For more information, please contact:
Michelle Kurtz I Communications and Digital Media Advisor
Anthony Fuchs I Director of Communications