On a grocery code of conduct, does it a) support; b) endorse; c) oppose; or d) reject a code?
My previous column, Better start hoarding Pepsi and Frito-Lays, stated that a Competition Bureau market study on grocery competition last year had “called for a major increase in government intervention, including: a national grocery code of conduct, controls on how grocery chains sign property deals, allow suppliers to form buying groups, mandate unit pricing and promote the entry of foreign discount stores.”
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On day of publication, I received an email from Marcus Callaghan (il / le | he / him), Manager of Strategic Communications — Competition Promotion, Public Affairs and Outreach Directorate, Competition Bureau, Government of Canada.
“I am writing,” said Callaghan, “to request a correction of misinformation” in the Pepsi column. The fact is, he said, that “the Competition Bureau’s retail grocery market study report did not call for a national grocery code of conduct, nor did it call for the formation of buying groups.”
First, I would like to apologize for any factual mistakes or erroneous conclusions contained in the column, which was not really about the Competition Bureau or its numerous interventionist proposals to deal with high food prices and alleged lack of competition in the grocery industry— interventions that also include urging provincial and territorial governments to “take measures to limit property controls in the grocery industry, which could include banning their use.”
Despite its extensive calls for government interventions, the bureau apparently now seeks to reject and counter any suggestion that it has “called for” a code of conduct or the formation of buying groups.
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I will now attempt to review the bureau’s allegations.
According to the Cambridge Dictionary, to “call for” something means “to suggest strongly that something should happen or is necessary for some reason.”
In the case of the grocery code of conduct — and by strict definitional standards — it is accurate for the bureau to say that its market study recommendations did not directly “call for” a code. But the bureau’s study does support the development of a code of conduct. On page two of the report, it states that “in addition to the above recommendations for governments across Canada the Bureau commits to taking other steps to better promote competition in the Canadian grocery industry.” One of those steps, the study says, is to “Provide a pro-competitive perspective to support the implementation of Canada’s grocery code of conduct.”
Regarding the code of conduct, therefore, the bureau “supports” the implementation of a code but rejects the idea that it “calls for” a code. If this warrants an apologetic bow of guilt, I apologize again for the inaccuracy.
But then I would like the bureau to answer the following multiple-choice question: What is the Competition Bureau’s position on a grocery code of conduct? Does the bureau a) “support” a code; b) “endorse” a code; c) “favour” a code; d) “prefer” a code; e) “oppose” a code; f) “reject” a code; or g) “it depends.”
On the second issue, Callaghan is correct in that the market study itself did not call for the establishment of buying groups that would allow independent groceries to collaborate in dealing with suppliers. The study says that buying groups should be “approached with caution” because they “can also raise competition concerns.” For example, certain agreements between competitors can violate the law and lead to businesses sharing information when they should not, and working in other ways that can hurt competition.
So the bureau is opposed to buying groups, right? No. The final statement on buying groups in the market study is this: “So, while buying groups can facilitate competition in certain situations, they should always be approached with caution. The Bureau’s approach to buying groups is set out in our Competitor Collaboration Guidelines.”
The bureau’s approach, as stated in the guidelines, is that it is not fundamentally opposed to buying groups. On the contrary, “Given that the buying group’s share of the relevant upstream market is only 10 per cent, the buying group is unlikely to hold monopsony power with respect to the purchase of widgets. Accordingly, the bureau would not be likely to challenge the agreement under section 90.1.”
While that final waffle comment is framed as a negative in that the bureau would not challenge a buying group, the positive version would be that the bureau would “allow” buying groups — as I said in the column.
In his last communication to the Post, Callaghan said that “the inferences being derived in Mr. Corcoran’s explanation are not supported in fact.” In my view there was no need for a correction or even much of a clarification on my part. There appears to be some need, however, for a clarification from the bureau on its approach to a grocery code of conduct and the formation of buying groups. Is the bureau pro or against the two concepts? Perhaps someone at the bureau would like to write an op-ed explaining its position.
• Email: tcorcoran@postmedia.com
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