The Competition Bureau has initiated a probe into the implementation of minimum advertised pricing strategies within the grocery industry, which can restrict retailers from promoting their lowest prices. The investigation aims to determine if these policies impede Canadians from accessing discounts, dampen price competition, create barriers for new and discount grocers, and facilitate price coordination among grocers.
Jeanne Pratt, the agency’s interim competition commissioner, emphasized the importance of grocery stores being able to showcase their best deals. She expressed concerns that policies limiting this ability could hinder competition among grocers and hinder consumers from benefiting from lower prices.
Minimum advertised pricing policies establish a price floor for products that retailers can promote, although they may still offer the product at a lower price. These rules are commonly used by suppliers in the retail sector to safeguard a brand’s reputation, incentivize retailers to offer superior service, or prevent certain retailers from capitalizing on the marketing efforts of others.
The Competition Bureau is urging industry stakeholders and consumers to provide evidence regarding the utilization of minimum pricing strategies. The information gathered will support the ongoing investigation and assist in evaluating competition within Canada’s food supply chain.
Earlier in the year, the agency launched an inquiry into competition within the grocery sector, focusing on potential issues in production, processing, transportation, distribution, and pricing.