Saturday, October 29, 2016

Loblaws under investigation

The Bureau of Competition Policy has asked four suppliers to Loblaws to provide their files on sales to the supermarket chain.

It expands an inquiry that began in December, 2014, when it sought similar information from 12 suppliers to Loblaws.

The allegations are similar to those investigated by the late Justice James Leach in the late 1970s.
The Leach inquiry unearthed information about discounts, rebates and allowances the supermarket chains, led by Dominion Stores and Loblaws, used to pressure suppliers.

The four are General Mills, Wrigley, Reckitt Benckiser (Canada) Inc. and A. Lassonde Inc.

It was farmers who complained, in the 1970s,  especially about pressure applied to fresh produce suppliers.

The current investigation is focusing on many of the same practices with a view to determining whether they are unfair and illegal competition.

During the Leach inquiry, one tactic that was revealed was a price discount for reaching a certain volume, but only Dominion, the dominant chain at the time, bought that volume from the supplier.

That skirted a federal competition regulation that requires suppliers to offer the same deal to all customers.

In the end, Leach did not accuse any company of wrongdoing.

More important, he ignored a recommendation from the Ontario Federation of Agriculture, which was a prominent participation in the hearings, that the province set up a watchdog where suppliers could register complaints about unfair pressures and practices.