CEOs of Loblaws, Sobeys agree to appear before parliamentary committee investigating food prices, if asked

The CEOs of Canada's two largest grocery chains - Loblaw Companies and Empire Company - have agreed to appear before a parliamentary committee to face questions about skyrocketing food prices and surging corporate profits if they are asked to attend.

If requested (Loblaw CEO Galen Weston) will attend, and we look forward to reinforcing the testimony we have already provided that highlights the work we've done to fight inflation for customers," Loblaw told the Star in an email.

This comes after Weston, Empire CEO Michael Medline, and Metro CEO Eric La Fleche were summoned by the House of Commons agriculture committee on Monday as part of its inquiry into profiteering by the grocery industry and its business practices. The investigation began in October and the date for the next session has yet to be scheduled.

Empire confirmed to the Star in an email that Medline will appear before the committee if asked. Metro did not respond to an inquiry on whether La Fleche would attend.

All three were previously invited to attend committee meetings focused on the rising cost of food, and were criticized when none appeared personally to respond to questions, sending senior executives to attend in their place.

Skyrocketing grocery bills

The CEOs need to appear to show respect and some accountability," said Sylvain Charlebois, head of the Agri-Food Analytics Lab at Dalhousie University. Not showing up is insulting to MPs and the Canadian public.

It's the business community's duty to share information and educate the public," he added. This could be an opportunity for the CEOs to explain what they're going through and their business model."

Consumers have grown weary of skyrocketing grocery bills as the big grocers report record profits. Estimates for 2023 food costs show that prices will be even higher than they were last year, with an increase of about five to seven per cent mostly on staples including dairy and meat, according to Canada's Food Price Report 2023.

Meanwhile, Loblaw in its third quarter had profits of $556 million - up from $431 million in the same period last year. Empire, which in addition to Sobeys operates FreshCo and Farm Boy, saw second-quarter profits drop slightly to $187.5 million, down from $188.5 million a year ago, partly because of investments in its Voila delivery arm.

New Democrat MP Alistair MacGregor put forward the proposal to summon the CEOs during Monday's meeting, which got unanimous support from the committee. Failing to comply with a summons could potentially mean being taken into the custody of the Sergeant-at-Arms of the House of Commons, who as senior officer for Parliament has the power to bring in individuals before the House.

In a December committee meeting, MPs grilled senior executives over higher earnings seen by food retailers during the pandemic and why the CEOs failed to attend.

Retail Council of Canada

MacGregor demanded to know why Loblaw executive Jodat Hussain was appearing and not Weston. Hussain, the senior vice president of retail finance, said he was the best suited to answer these questions."

The Retail Council of Canada, which advocates for grocers, said future meetings should be used to look at the issues plaguing the grocery industry on all levels of the supply chain.

The hearings should be used to call upon global brands - manufacturers, processors and wholesalers - as they have been repeatedly raising their rates across the board," said Michelle Wasylyshen, a spokesperson for the council, in an email.

Grocers are food distributors - they buy goods from suppliers and then sell them to customers. This means that they are largely dependent on what suppliers ask them to pay for their products," Wasylyshen said.

One of Canada's biggest food manufacturers Frito-Lay hiked prices by 10 per cent at grocery stores earlier in February, a move that retailers say shows how rampant inflation is impacting the food industry and driving a wedge between stores and suppliers.

Charlebois agrees that the heads of all major players involved in the supply chain should be summoned to testify as well as the CEOs to understand and appreciate supply chain economics."

Inviting grocers to the table is just the beginning," Charlebois said. They should invite CEOs of major processing players as well to fully appreciate what is going on across the supply chain."

Ghada Alsharif is a Toronto-based business reporter for the Star. Reach Ghada via email: galsharif@torstar.ca