The cost of food has been a near universal concern on the minds of people in Lunenburg County. It has even provoked a nationwide boycott of Loblaws-owned stores with limited effect.
While the impact of the boycott has been modest, their actions have resulted in a public discussion about why prices are so high and what to do with it. Recent scholarship on the problem has suggested high grocery costs are caused by the monopoly power commanded by agri-food conglomerates. This has led this growing food justice movement to assert that the grocery price problem will not be fixed until Canada implements price controls and brings back the competition laws that allow us to break up large corporations and increase food sovereignty in our communities.
Food price increases have been attributed in Canadian media to a complex set of factors linked to the series of social, political, and environmental crises facing our world: labour shortages, pandemic-related supply chain disruptions, financial betting on food commodity prices, increasing energy prices, wars in major food producing areas, and extreme weather whose severity has been worsened by climate change.
These factors no doubt have an impact on food inaccessibility, however Canadian researchers have identified that they pale in comparison to the major cause: monopoly power in our food system. Economists understand that high prices are distorted upward when a monopoly of companies achieve more than 40% control of an economic sector.
A 2022 USDA report found that Canada’s top three food retailers collected 59% of retail sales of food in 2020. These three companies enjoyed a 50% profit increase between 2019 and 2022, from $2.4 billion to $3.6 billion, according to a report by Canada’s Competition Bureau in 2023. These companies have notably been caught engaging in cartel-like retail practices, such as Sobey’s use of restrictive covenants to control food prices at Dollarama stores in 2023 and industry-wide collusion of bread prices between 2001 and 2015
Monopoly control in our food system, however, is not limited to grocery chains; it is also taking place at the level of food production as well. The ETC Group found that in 2022, four companies control more than 50% of global commercial seed sales, six companies control 50% of agricultural machinery sales, and seven companies control 84% of potash fertilizer sales.
My own doctoral research on farmland ownership in eastern Ontario found that a variety of different kinds of corporations—including large-scale farm corporations and farmland investment firms—increased their farmland holdings by 42.1% between 2000 and 2017.
The economic power of agri-food monopolies are locked-in through government laws and regulations that are shaped by a process of corporate capture. This occurs when governments reach out to “industry experts” to help “modernize” policy in the interest of export growth and job creation. This allows monopolistic food companies to acquire favourable regulatory conditions that protect their ability to increase profits and command a larger proportion of the market.
One recent example of this that I observed as a policy analyst for a non-profit group involved an agrifood lobbying group that was caught writing a preliminary draft of a regulatory guidance document about how the Canadian Food Inspection Agency should allow minimal regulations on new GMO technology. The guidance document that was eventually released by the Agency contains most of the recommendations demanded by the lobbying group.
High food prices are hardly surprising when one considers the extent of monopolization and corporate capture that has taken place in Canada’s agri-food sector over the past decade. This trend has been enthusiastically supported by both Liberal and Conservative governments since the neoliberal turn of 1970s, and will continue unless an entirely different approach to governing the food system is taken.
Farmers around the world have called for a new way of managing the production and distribution of food that is based on the concept of “food sovereignty”. This concept focuses on how political and economic power is distributed throughout the food system so that the people who produce and consume food are the ones in control. Such a way of managing the food system could lead to the prioritization of good farmer livelihoods, sustainable production, and equitable distribution.
The most immediate action that could be taken to reduce monopoly power and advance food sovereignty would be to restore Canada’s competition laws to what they were like before reforms made under the Paul Martin and Stephen Harper governments. This means setting specific limits to how much market share a company can control and enforcing it by breaking up large grocery chains, agri-food processors and distributors, and agri-input companies. Realistically, I do not think we will see grocery prices go down until we have made this change.
Christy Kelly-Bisson, PhD, is a political science researcher based in rural Lunenburg County
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