A meat counter in a grocery store is seen in Montreal, on Thursday, April 30, 2020. Canada's competition watchdog is launching a study into the grocery sector to examine whether the highly concentrated sector is contributing to rising food costs. THE CANADIAN PRESS/Paul Chiasson

Competition watchdog launches study into grocery sector amid rising food prices

Canada’s competition watchdog is launching a study to examine whether the highly concentrated grocery sector is contributing to rising food costs.

“With inflation on the rise, Canadian consumers have seen their purchasing power decline,” the Competition Bureau said in a news release Monday.

“This is especially true when buying groceries. In fact, grocery prices in Canada are increasing at the fastest rate seen in 40 years.”

Grocery prices in September rose at the fastest pace since 1981, with prices up 11.4 per cent compared with a year ago. That compared with an overall inflation rate of 6.9 per cent.

Although the overall inflation rate has begun to drop from its peak of 8.1 per cent in June, food prices have not only outstripped that but continue to rise.

The Competition Bureau said Monday its study will examine to what extent higher grocery prices are related to changing competitive dynamics in the sector.

It expects to explore how the government could act to combat grocery price increases by way of greater competition in the industry.

It noted that the grocery sector is concentrated, with many Canadians buying from one of three companies: Loblaw, Metro and Sobeys’ parent company Empire Co. Ltd.

The level of competition varies across the country, it said.

The Competition Bureau will provide a set of recommendations for the government in its final report, which it plans to publish in June.

Earlier this month, the House of Commons Agriculture Committee voted to investigate food prices.

The House of Commons also voted unanimously in favour of an NDP motion calling on the government to tackle “corporate greed” in the grocery sector.

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