A cartoon of a woman hitting a piñata, only the head is Galen Weston and the candy is No Name Brand food.

Photo Credit: VanIsle.News Staff

Local MP Calls Out “Greedflation”

If 'greedflation' is happening, who is responsible?

The “price freeze” isn’t all that special afterall

“People can’t keep up,” Courtenay-Alberni MP Gord Johns said Friday. That was the day after Finance Minister Chrystia Freeland presented the Fall Economic Statement in Ottawa.

“The Liberals and Conservatives are disconnected with the reality of working people.”

He was talking about something that’s been coming up more and more lately.

Inflation, or as he called it, ‘Greedflation.’

He accused both the Liberals and Conservatives of not making large grocery chains, oil companies, and big box stores pay what they owe to help families pay for food.

Johns is a very vocal MP. But right now, he’s far from the only one saying this.

Just looking at grocery stores, there’s definitely ‘greedflation’ happening. The question is, which part of the grocery supply chain is the problem?

The drastic increase in grocery prices is hard to ignore. Canada’s food prices in September were up 11.4 percent, even though overall inflation was only 6.9 percent.

Why are groceries so much more expensive?

Loblaws owns all President’s Choice brands and chains like SuperStore. Last quarter, they made net earnings of $387 million. That’s up $12 million from the same time last year, and by $121 million from the same period in 2019, before the pandemic hit.

Sheesh! At least the pandemic did good things for some people? Maybe?

Loblaw CEO Galen Weston keeps saying that price increases at his stores are “maddeningly” out of his company’s hands.

But they’re not so out of his hands that he can’t fit in a few good PR moves.

The company announced they would freeze prices on all No Name brand food until January. He did that the same day parliament was set to vote on looking into the profits of grocery retailers.

How convenient.

NDP MP Alistair MacGregor called it a “PR attempt to deflect from the negative attention.” He told the BBC that it “demonstrates the fact that the CEO of Loblaw always had it within his power to freeze prices.”

MacGregor isn’t wrong, either. In fact, this particular price freeze is no news at all. It happens every single year.

“It is an industry practice to have a price freeze from November 1st to February 5th for all private label and national brand grocery products,” a spokesperson for the Metro chain told CBC News on Monday. “And this will be the case again this year in all of Metro banners.”

Good job, marketing department!

With the stark price increases, MacGregor echoed Gord Johns’s statements. He said there’s “a moral call there for companies to reform their business practices” to tone down inflation and help struggling families.

Interestingly though, a study that’s just been completed by Dalhousie University suggests that this is a lot more than a case of some greedy CEOs.

Dr. Sylvain Charlebois is the Director of the Agri-Food Analytics Lab at Dalhousie University in Halifax. After researching recent earnings reports of both American and Canadian grocery giants, he isn’t sure the grocery stores are entirely to blame.

“We looked at financial reports from major grocers in both Canada and the United States. If “greedflation” exists, the available data suggests grocers are not responsible, he said in a press release.

“Yes, they’ve actually posted record profits in dollars,” Charlebois told the BBC. “But when you look at margins, they’re relatively similar.”

He said this doesn’t say much about wrongdoing in other parts of the supply chain. There are a lot of points where people may be padding their profit margins.

“We know very little of what is going on in food processing, transportation, and at other companies who participate in the food industry. A proper investigation led by the Competition Bureau of Canada would shed some light on practices in the industry,” said the report.

So who is looking into food processing companies? Or other parts of the food industry?

While the results of Charlebois’ study may be good news for investors, he sais it does nothing to help people through a very real recession and “much more needs to be done.”

Until “much more” is done to curb the source of rising food prices, we hope Johns continues to raise his voice for all of us.