The federal Competition Bureau says supermarkets have too much clout and governments ought to encourage entrants to increase competition.
But the Competition Bureau is itself to blame for the situation because it approved Sobey's purchases of Canada Safeway, the Oshawa Group which owned Dutch Boy supermarkets among others, Farm Boy and Longo's, Loblaws purchases of Provigo, T&T Supermarkets, Darrigo's and Shopper's Drug Mart and Metro's purchases of A&P and Steinberg's supermarkets and Jean Coutu and Bruno drug store chains.
Canada's grocery industry now is dominated by Loblaws, Sobeys, Metro, WalMart and Costco and consumers end up paying too much for groceries, the report concluded.
It recommends that governments:
- Establish a Grocery Innovation Strategy aimed at supporting the creation of new types of grocery businesses, specifically ones that only sell online.
- All levels of government encourage new independent and international players to set up shop in Canada.
- Mandate harmonized unit pricing, making it easier for consumers to comparison-shop for deals.
- Limit property controls, which currently restrict how real estate can be used by competing grocers, making it difficult, or even impossible, for new stores to open.
"Change will take time," the bureau said. "These solutions will not bring Canadians' grocery bills down immediately. But by acting now, governments at all levels can take steps toward creating a more competitive grocery industry in Canada."
The House of Commons Agriculture Committee has also been working on a policy that would govern relations between supermarket chains and suppliers who have complained about abusive practices.
