Competition Bureau investigating grocery store minimum pricing policies

The Competition Bureau has launched an investigation into the use of minimum advertised pricing policies in the grocery sector, rules that can prevent retailers from advertising their lowest prices.

The watchdog is examining whether these policies make it harder for Canadians to find deals, reduce price competition, create barriers for discount and new grocers, and make it easier for grocers to co-ordinate prices.

“Canadians expect grocery stores to be able to advertise their best deals,” Jeanne Pratt, the agency’s interim competition commissioner, said in a statement Monday.

“We’re concerned that policies that prevent this make it harder for grocers to compete, and for consumers to access lower prices,” she said. “At a time when food affordability remains an important concern for Canadians, we want to hear about how these policies are affecting grocery prices and consumer choice.”

Minimum advertised pricing policies set a floor on the price retailers can advertise a product, although they may still be able to sell it for less.

In the retail industry, suppliers may use advertised price rules to protect a brand’s image, encourage retailers to provide better service or prevent some retailers from benefiting from the promotional efforts of others.

The bureau is asking industry participants and consumers to come forward with evidence about minimum pricing use.

It says the information it receives will support its investigation and inform its examination of competition across Canada’s food supply chain.

In June, the agency launched an investigation of competition in the grocery sector, including potential problems in production, processing, transportation, distribution and pricing.