Home Economy Political pressure on grocers grows as NDP pushes for profit survey

Political pressure on grocers grows as NDP pushes for profit survey

by SuperiorInvest

Proposal to examine evidence of growing public relations problem for major Canadian grocers amid soaring food inflation

Content of the article

A New Democratic MP wants to summon grocery leaders to the House of Commons to explain why Canada’s biggest supermarket chains are growing profits at a time when food inflation is rising at its fastest rate in decades.

Advertising 2

Content of the article

Alistair MacGregor, who represents the riding that covers the southern part of Vancouver Island, advised that House of Agriculture Committee on Wednesday night that he intends to table a motion for the committee to investigate “profit-driven inflation” in the grocery store, setting the stage for a vote as early as next week.

Content of the article

MacGregor is the only NDP lawmaker on the committee, and it was unclear whether he would be able to get enough support from the other parties to get his bill passed. The 12-member committee consists of seven Liberals, including chair Kody Blois, three Conservatives, MacGregor and Yves Perron of the Bloc Quebecois.

NDP MP Alistair MacGregor.
NDP MP Alistair MacGregor. Photo: Justin Tang/The Canadian Press

Regardless of the outcome, MacGregor’s proposal is further evidence of a growing public relations problem for Canada’s big grocers, as economists, consumer advocates and the NDP have publicly questioned whether profits or price gouging are driving the sector’s profit growth.

Federal NDP Leader Jagmeet Singh has emerged as one of the most vocal critics of the grocery store, slams a leading grocery CEO on Twitter and blaming “corporate greed” for the fastest food inflation in four decades.

Advertising 3

Content of the article

The three largest grocers—Loblaw Cos. Ltd., the parent company of Sobeys Empire Co. Ltd. and Metro Inc. based in Quebec — say the higher profits and wider profit margins stem from other factors and have nothing to do with the broader inflation story. . For example, they all say they are benefiting from increased demand for high-margin health and beauty products now that pandemic restrictions have been lifted and people are returning to offices and parties.

But accounting experts say it does it is difficult to know whether these explanations are true only use data contained in public financial statements, leading to calls for a public inquiry into food industry profits.

“If we really want to get to the bottom of this, we need some objective third-party analysis,” said Robin Shaban, a former Competition Bureau official and co-founder of Canadian Anti, a think tank. – Project Monopoly. “There are many limits to what can be done with what is publicly available.”

Advertising 4

Content of the article

MacGregor’s formal notice of the motion called on the committee to “examine the record profits of major grocery chains and their CEOs in relation to employee wages and food costs in Canada.” MacGregor also wants the investigation to focus on the food oligopoly’s ability to use its dominance to “cut into the incomes of Canadian farmers.” The inquiry would call witnesses including food CEOs, unions and farmers, according to the motion notice.

“I think all the political parties are heating it up,” MacGregor said in an interview Thursday. “Many of my constituents are knocking on my door talking about high food prices.

But John Barlow, a Tory farming critic and one of the committee’s vice-chairmen, said he believed such an inquiry into competition and wages would be better suited to the House of Commons industry committee, which has previously dealt with issues of power imbalances in the food industry. sector.

Advertising 5

Content of the article

“We’re going to try to make some amendments,” Barlow said. “I think he’s missing some things here and the way this proposal is worded I think it would be much better in the industry committee because it talks about competition, wages – that’s not really the mandate of the agriculture committee.”

Barlow said he would be “more open” to the inquiry if MacGregor refocused his proposal to address rising input costs at the farm level, including fertilizer prices and the impact of the Trudeau government’s carbon tax.

Many of my constituents are knocking on my door talking about high food prices

Alistair MacGregor, MP

Federal Agriculture Minister Marie-Claude Bibeau would not say whether she supports a closer look at the food industry.

“The committee can decide at their own discretion as to the studies they want to pursue,” she said at a press conference on Wednesday. “Of course we are all concerned about the cost of food. And I’ll let them decide according to their priorities.”

Advertising 6

Content of the article

Food executives dismissed the profit audit as unfounded and misleading. Karl Littler, senior vice-president of the lobby group Retail Council of Canada, told the House of Commons finance committee on Wednesday that criticism of the sector’s profit growth shows that few people in Canada understand how inflation works.

“We here in Canada have little current experience with inflation that has been at historic lows for more than 30 years,” said Littler, whose organization represents major grocers. “And one problem with this lack of modern experience is that some commentators are rushing to judgment or trying to play the blame game for their own purposes.”

Advertising 7

Content of the article

And earlier this month Empire chief executive Michael Medline he exclaimed ongoing controversy in a speech at his company’s annual general meeting.

“Frankly, I’m tired of these armchair quarterbacks who make little effort to understand even the basics of our business, but are comfortable sitting on the sidelines and proclaiming how Canadian companies are reaping disproportionate profits on the backs of inflation,” he said.

That caught the attention of the NDP leader, who complained on Twitter that Medline’s total compensation of $8.65 million in 2022 represented a 15 percent increase over 2021. “Did the workers at his stores get a 15 percent raise? No. Instead, he took away their hero’s wages during the pandemic,” Singh said, referring to June 2020 scandal that prompted Ottawa to change federal worker protections against wage fixing.

In its latest Empire financial update reported net income of $187.5 million in the latest quarter, little changed from a year earlier. Meanwhile, Loblaw increased profits to $566 million on an adjusted basis in his last quarter, which is 22 percent more than last year. And Metro reported quarterly profit of $275 million, up nine percent.

All three companies did not respond to questions on Thursday about whether their chief executives would attend a House of Commons committee hearing on food profits.

• By e-mail: jedmiston@postmedia.com | Twitter:

advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encouraging all readers to share their views on our articles. Comments can take up to an hour to be moderated before they appear on the site. We ask that your comments be relevant and respectful. We’ve enabled email notifications – you’ll now receive an email when you receive a reply to your comment, an update to a comment thread you’re following, or when a user you’re following comments. Visit our Community Guidelines for more information and details on how to edit yours by e-mail Settings.

Source Link

Related Posts

%d bloggers like this: