Loblaw CEO Galen Weston called to testify before government over food price gouging
Loblaw Companies Ltd. CEO Galen Weston Jr., who has emerged in recent months as the face of runaway food price inflation at major Canadian grocery chains, has reportedly agreed to appear before federal politicians and stakeholders to answer what will likely be some tough, awkward questions.
Representatives for both Weston, whose company is Canada's largest food-and-drug retailer, and Empire Company CEO Michael Medline (Sobeys, Farm Boy, Longo's and more,) told The Toronto Star this week that they would — if asked — provide testimony to the House of Commons Standing Committee on Agriculture and Agri-Food as part of an ongoing study on Food Price Inflation.
And they will be asked, per the minutes of a very recent agri-committee meeting.
The committee voted unanimously on Monday, Feb. 13, to adopt a motion put forward by NDP MP Alistair MacGregor requesting that the supermarket bigwigs (as well as the CEO of Metro) be summoned to the House of Commons for questioning.
McGregor also moved the committee to expand its study on food price inflation by increasing the amount of time dedicated to the issue with "at least six meetings."
Today members of the #AGRI Committee unanimously passed my motion to summon the Presidents and CEOs of the three biggest grocery chains in Canada: Empire, Loblaws, and Metro to answer for their profit-driven inflation of food prices.— Alistair MacGregor (@AMacGregor4CML) February 14, 2023
The motion specifically asked that the committee "summon the Chief Executive Officers and Presidents of Loblaw Companies Limited, Galen G. Weston, Metro Inc., Éric R. La Flèche and Empire Company Limited, Michael Medline," as well as additional witnesses to provide testimony.
The committee voted 11-0 in favour of the motion, which gives each party until 4 p.m. on Tuesday, February 28, to submit "their lists of additional witnesses."
Once all information is received, the committee chair will schedule the hearing "in a manner that is fair to all parties."
It is not yet clear if any of the executives have responded to the house committee directly, despite Loblaw and Empire telling The Start that they would cooperate.
Metro Inc. CEO Éric R. La Flèche has yet to publicly address his being summoned to participate in the government's inquiry into allegations of artificial price inflation and gouging by Canadian grocery giants, some of which posted record profits in 2022.
Loblaw bolsters evil reputation by reporting huge profits as grocery prices skyrocket https://t.co/5zb0HJzXQv #Loblaws— blogTO (@blogTO) November 16, 2022
Not to be confused with a similar investigation announced by Canada's Competition Bureau this past fall, or a recent change.org petition calling upon the government to investigate Loblaw, specifically, the Standing Committee on Agriculture and Agri-Food's "study of food price inflation" began in early October.
Monday's agri-committee meeting marked the fourth of its kind focused on rising food costs, none of which were attended by the aforementioned CEOS (all of whom have so far only sent senior executives in their place to answer questions.)
Several witnesses provided expert testimony at Monday's meeting, including Restaurants Canada VP Olivier Bourbeau, Canadians for Tax Fairness economist D.T. Cochrane, and Centre for Future Work director Jim Stanford.
"Average grocery prices have increased 11 per cent in the last year, much faster than even the overall inflation rate (which averaged 6.3 per cent in the same time)," reads a report presented by Stanford.
"Canadians also have a visceral reaction to the concentrated oligopolistic power represented by the major supermarket chains. The three biggest chains (Loblaw, Metro, and Sobey's) control, including with their numerous subsidiary brands (Food Basics, Superstore, etc.), almost two-thirds of food retailing in Canada."
I'm appearing as expert witness this evening at the House of Commons Agri-Food Committee's inquiry on food inflation. I will summarize our @CntrFutureWork research on the surge in food retail profits that accompanied the pandemic & the take-off of food inflation. @CanadianLabour pic.twitter.com/y0aTpf7FV0— Jim Stanford (@JimboStanford) February 13, 2023
Stanford goes on to detail "past exposés of anti-competitive behaviour by supermarkets," including the now-infamous bread price-fixing scandal and "the simultaneous decision by all three chains to cut wages for grocery clerks by $2 per hour after the COVID lockdowns."
"The supermarket chains complain they are being unfairly singled out for responsibility for food inflation... they invoke vague references to 'profit margins' and other financial ratios to pretend their profits are not unusual – even though they are at record highs (confirmed by their own financial reports)," the report continues.
Using aggregate data from Statistics Canada, Stanford goes on to prove that, as he puts it, "Loblaw and the other chains are not innocent intermediaries."
"These companies have seized the opportunity provided by the volatile conjuncture of disrupted supply chains (from the pandemic, climate disasters, and the war in Ukraine) and consumer desperation to increase prices well beyond what would be required to cover their own input costs," writes the economist.
"But our legitimate anger at the supermarkets should be the start of a bigger conversation about the power of corporations to charge whatever the market will bear, even in a social and economic emergency... the line of accountability for [the predicted impending recession] goes through the Bank of Canada and its aggressive interest rate hikes, to the corporations whose greed and opportunism sparked the inflation in the first place."
It is my sincerest hope that Stanford was using a microphone to speak these words at the House of Commons, and that he dropped said microphone at this point.
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