When the CEOs of Canada's major grocery chains testified at the parliamentary committee on Agriculture and Agri-Food last week, NDP Leader Jagmeet Singh sat in o try, but fail, to flame high grocery profits for inflation.
In blame game over high food costs, Superstore mogul scores win over NDP's Singh | Edmonton Journal - David Staples
March 10, 2023 - "Galen Weston Jr. ... is one of Canada’s wealthiest people ... he’s charging us far more than we’d like with food inflation at 10 per cent, and his gargantuan company, Loblaw, parent company of outlets such as No Frills, Real Canadian Superstore and Shoppers Drug Mart, makes enormous profits, with $556 million profit in the third quarter alone, up 29 per cent from last year.
"The NDP pushed to get Weston before a parliamentary committee to answer questions. But I reckon that when the two faced off in Ottawa on Wednesday, Singh got far more than he bargained for in the one-two punch of Weston and fellow grocery store executive Michael Medline of Empire/Sobeys.
"Medline pointed out food inflation is happening around the world and is driven by factors such as soaring energy costs. In the last three years, all input costs in food production and distribution have gone up, Medline said, including butter (up 59 per cent), corn oil (140 per cent), wheat (109 per cent) and four (63 per cent for baked goods, and tin (53 per cent) and pulp (45 per cent)....
"When a customer buys $25 in groceries, his company’s profit is just $1, Weston said of Loblaw. 'That means even if the industry had zero profits, a $25 dollar grocery basket would still cost $24. So the claim that Canadian grocers can correct food price inflation is simply wrong.' Other products such as financial services, clothing and, most importantly, pharmaceutical sales make up more than half of Loblaw’s business, Weston said, and they drove its higher profits....
"Singh asked Weston the same pointed question repeatedly. 'We have families that are struggling to buy food for their kids in a G7 country and they look at you and they see you making record profits. How can you justify that?' Singh accused Loblaw of making 'excess profit' of $1 million per day. Loblaw is a big company so the numbers are large, Weston said. 'Reasonable profitability is an important part of operating a successful business. I think a dollar (profit) out of $25 of sales is reasonable.'
"To test the credibility of Singh and Weston’s claims, I went to Prof. Sylvain Charlebois of Dalhousie University, who testified previously on food inflation.... It now costs more to ship food, Charlebois said, with unstable energy costs, unstable geo-politics and drought all playing a role. 'It’s a bit bizarre to see people pointing fingers at either a company or a man. Is Galen Weston responsible for Germany’s 20 per cent food inflation rate? I don’t think so.… When I see a guy like Jagmeet Singh attacking the grocers, I just don’t know where he’s coming from.' Canadian grocers have margins of 4.5 to 6.0 per cent on food sales, Charlebois said....
"John Barlow, a Conservative MP from rural Alberta, referenced the expert testimony that inflationary government spending and an uncompetitive tax regime, including the carbon tax, are drivers of food inflation.... Barlow might also have mentioned Singh’s steadfast support of policies that have made energy scarce and expensive, such as the NDP’s dogged opposition to nuclear power and oil and gas production.... This is a root cause of food inflation on a global scale, given how critical our previous low fuel prices were in pushing down input costs. If Singh is in need of a scapegoat for families not being able to feed their kids, he would do well to first look in the mirror."
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