March 4th, 2024

Loblaw discount reduction not evidence of grocery collusion: competition expert

By The Canadian Press on January 18, 2024.

An expert in Canadian competition says Loblaw’s move to reduce discounts on its last-day sale items is highly unlikely to be evidence of collusion in the grocery industry. The Loblaws flagship location on Carlton Street in Toronto on Thursday May 2, 2013.THE CANADIAN PRESS/Aaron Vincent Elkaim

An expert in Canadian competition says Loblaw’s move to reduce discounts on foods nearing their best-before date is a normal practice in the industry, not a sign of collusion.

News broke this week that the biggest grocery retailer in the country would no longer offer discounts of up to 50 per cent on such items, instead marking them down by 30 per cent across the board.

In a letter to the competition commissioner Tuesday, NDP MP Alistair MacGregor called for an investigation into potential anti-competitive practices or collusion in grocery retail.

MacGregor said that comments by Loblaw indicated they changed their discount to align with their competitors, and that this was cause for suspicion.

But Michael Osborne, the chair of the Canadian competition practice at law firm Cozen O’Connor, says it’s normal in retail for companies to observe one another’s practices and make changes of their own in an effort to compete.

Metro said on Tuesday that it has been marking down nearly expired items by up to 30 per cent for more than two decades.

This report by The Canadian Press was first published Jan. 18, 2024.

Companies in this story: (TSX:L, TSX:MRU)

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