Are our governments siding with big grocers?

CLIP: You know what? I just don’t believe it. Like there’s, it’s so ridiculous. We Used to buy more organic stuff and we just kind of cut that out. We’ve changed our whole, our whole diet.

Jordan: You don’t need me to tell you that groceries are more expensive than they’ve ever been. And you probably don’t need me to tell you that The owners of Canada’s biggest grocery chains are raking in profits. Despite that they also don’t attribute their profits to food markups either. And I’m sure you all are shocked to hear that, but after, well over a year of skyrocketing grocery prices, things may be reaching a breaking point.

CLIP: From Brantford to Scarborough, nearly 4,000 metro employees hit the picket lines today in the pouring rain to fight for.

Jordan: These workers have rejected a proposed deal that their union said was good because it didn’t go far enough because they say they can’t afford to buy their food at the stores they work at.

CLIP: Unfortunately, we are living in a time right now where working people, particularly working people at grocery stores, are just not making ends meet

Jordan: The percentage of people. Even middle class people using food banks is rapidly increasing. So is shoplifting. And some grocery stores are now demanding to check shopper’s bags on their way out of the store. Listen to anybody who is struggling to afford food, and they’ll tell you the same thing. This is an untenable situation. So what has the government done about it? A one-time grocery subsidy? What could they do about it if they wanted to? Well, a whole lot more actually. I’m Jordan Heath Rawlings. This is the big story. Corey Mintz is a Winnipeg based food reporter, the author of the 2021 book, the Next Supper, the End of Restaurants as we knew them, and what comes After. Hey, Corey.

Corey Mintz: Hello, Jordan. Great to speak

Jordan: With you. Why don’t you start by just telling us a little bit, I’m curious about what it’s like to be a food writer right now compared to four years ago, like so much everything from restaurants, which you’ve already written about to, to grocery stores and inflation, like everything about this beat must have changed.

Corey Mintz: Yeah, the ground kind of been turning underneath me for the past four or five years in a sense that the things that I wanted and was writing about in 2000 17, 18, 19, I was still arguing to convince people of, or to convince editors were relevant, given that the majority of food writing and, and, and on television and on social media was all about just things being delicious and chefs being cool, and there wasn’t really a huge audience for the discussion of food from the lens of economics labour class in this case, what we’re talking about, affordability and jobs and, you know, the pandemic came along, changed so much of life on earth and so much went back to the gravity of the status quo. But in terms of the topics that I wanna write about there’s, there seems to be an appetite for, or at least the audience has been educated by the dire circumstances we found ourselves in to take these things seriously.

Jordan: Well, and maybe we can just begin with the news hook as we do, as your piece did. What’s happening with metro workers in Toronto right now?

Corey Mintz: Well metro workers who are part of the Unifor Union did not agree on a new contract. I believe the negotiators were in support of the contract that was being offered by Metro, but the union voted overwhelmingly to strike, and they went on strike, I think the 29th of July. And the common complaint is they can’t afford afford to live in the city where they work, and I think pointedly shop for food at the store where they work.

Jordan: What has management said to that? I mean, there’s been a lot of talk in the past year, year and a half about how much money grocers make, and this seems like an awkward position for them to find themselves in.

Corey Mintz: Yeah, I mean, I I, I watched every minute of the, the testimony of the three grocery CEOs before Ottawa, and I think it was April or March, and I’ve, I’ve read every word the competition bureaus report, so maybe I’m a little too close to it.

Jordan: Well, that’s why we called you, you are too close. We want people who are too close to it.

Corey Mintz: Right. I reached out to both parties, didn’t get much of an answer from either, but the public statement from Metro has been that their offer on the table was a wage increase that was higher than the rate of inflation for 2023, which is a brilliant bit of spin because you know, I think generally we’ve all been aware of inflation, we’ve all been aware of food inflation, but to actually unpack the claim, we’re offering more than the rate of inflation, which is the bare minimum of what most of us want for a raise, except that the rate of inflation has basically been outta control for about two years. But food inflation has been about double that. I think the rate of inflation peaks somewhere around nine or 10% and food inflation maybe 14 or 15%. Overall inflation is starting to cool, not that that’s affect your housing costs or mine yet, but inflation overall has dropped to about 2.8%. Food inflation is still up at 9.1%. So yes, the rate of inflation is slowing, but people’s costs are still up. Where they were a year ago, the cost of gas still settled, you know, a dollar 50 or something like that, and they’re still paying more for food. And the prediction is that that price is not going to come down at all. We’re now, you know, it’s like climate change. We’re, we’re talking about, we can’t bring it back. We’re just talking about slowing it down those, so to say we offered you more than 2.8% is, if not disingenuous, misleading.

Jordan: Why is food inflation in Canada so bad compared to inflation overall or even how does it compare to other countries that have been dealing with the same thing? What is unique about groceries and food stuffs?

Corey Mintz: I don’t know if I’m qualified to tell you what’s unique in Canada. I can say that I know that actually food inflation in Canada, as high as it has been, is overall less than the average of how bad food inflation has been globally in most developed countries. The causes of it are various and disputed. You know, early on the pandemic we’re told pandemic, climate change, invasion of Ukraine, supply chain disruptions, people not able to go into work. Some of those factors have faded and some of them are still very present, but overall, we’re still a, experiencing some of them, and b, still experiencing the cost of some, you know, if you lose a crop due to pests, drought flood, then your next crop you need to charge a little more to make up for what you lost. And we are still constantly, I think, making up for some of that loss plus the weak Canadian dollar plus climate change, which is just making all of the issues of like losing crops get worse. Plus, when you talk about overall inflation, one of the biggest price spikes is in fuel. And fuel is, is an essential factor in getting food from where it’s grown to where it’s consumed, which is just gonna add on to the final cost. Plus one assumes a little bit of markup,

Jordan: The markup. I’m glad you mentioned because, and, and listen, I’m, I’m not here to judge business owners trying to turn a profit, but I do wanna ask you about the optics here, especially because you mentioned that you’ve listened to every word of testimony and read the competition bureau’s report. So as, as we are seeing this level of food inflation based on all the factors you just mentioned, how are the large grocery chains in this country doing? How are their optics looking compared to the rising costs of everything that you just cited?

Corey Mintz: Well, how they’re doing financially is great. Business is booming, you know, not exactly during those few early months of the pandemic where, you know, they said basically every day we’re doing Christmas level sales, which is a problem for them because they couldn’t stock the shelves that fast or restock the shelves. But overall, everyone’s latest reports are, sales are up, profits are up, right? And the accusation from the public and some opportunist politicians is, are these companies profiteering? Are they taking advantage of the fact that overall prices have increased X percent food prices have increased Y percent to say maybe we can slip in a little 0.5 there and no one will notice. And that’s part of what that investigation was out. It was about a much larger suite of issues, but that was the topic on which everyone could relate and was sort of watching to see what these CEOs would say. And again, and again, they sort of hid behind a, you wouldn’t notice this tiny percentage anyways. And b if our profits are up, you know, you can’t separate our overall profit from our food profit. That doesn’t mean our food profit is up. And they all kind of turned their pockets outwards and said, well, you know, cried poor and said, we also sell, you know pharmaceuticals and cosmetic or even gas at some of our hyper stores and we can’t separate these numbers. And they were asked by federal politicians, no, no, no, we need you to separate these numbers. And again and again, they promised, well, we did provide that data and just in case we didn’t, we promised to, if it’s anything’s missing, call me. Here’s my digits, you know, call, call me up. I promise I’ll be completely transparent. You know me, you know me homie. And what the competition report found was that was demonstrably false. They did not provide the information they promised and they did not provide enough information to categorically prove one way or another that food sales or food profits are up or not included in that increased overall profit margin. And without them providing that answers, what are we to conclude other than let that fuel the general hostility that we increasingly feel for these groups which control it bears repeating about between three companies, 60% of the Canadian grocery market.

Jordan: Could the government compel them to separate that data and provide it? What could the government do? What has it done? I mean, outside of I guess some people will be familiar with a grocery subsidy for lower income Canadians. Beyond that, what’s on the table here,

Corey Mintz: Right? So I’ll name drop Vass Bednar here, who’s a expert in competition,

Jordan: A frequent guest on this show, a good friend of the show.

Corey Mintz: She’s, she’s brilliant. And you know, she’s very keen on making this distinction that the report was not a market study. Now, market study is what gives the competition, the legal authority to compel these companies to actually open up their books, right? It’s that that’s a warrant. That is absolutely within the, the government’s ability to provide as is what VA has recently advocated for in a Globe and Mail column, which was price controls on some key staples. I think she sort of cited, you know, baby formula, certain sort of essentials that if the government could at least promise we are going to fix prices on a handful of these things. And I think she didn’t use the term fix because that’s probably not popular, but whatever it is, you’re gonna get the sort of Milton Friedman anti-regulation people in an uproar over any kind of government stipulating what prices are. But we already have that in this country. It’s called supply management, right? That’s how our, that’s how our milk industry works. But she argued that the government could temporarily freeze prices on certain items to make the mort affordable. And also to, I think sort of take away what is the perception of these companies as profiteering. And I think, I think the government could probably go farther than that.

Jordan: Why haven’t they even, I guess, publicly mused about doing this kind of stuff? The picture you paint in, in your piece and have painted in this conversation is like, this seems like something Canadians could mostly get behind. Nobody can afford the groceries they used to afford. And, and it would seem, at least from a public optics point of view, this could be a good move for the government.

Corey Mintz: When you say a good optics, it depends on whose support they’re looking to rally. The government did do something. They have issued a federal grocery rebate, which ranges somewhere between like $225 to a maximum of $467, which to people who need it, any money is helpful. But a onetime payment that covers probably about two weeks of groceries for anyone with kids seems more like a PR solution rather than the federal government actually trying to do something about the affordability of groceries. And, you know, we’ve got this strike with Metro. I haven’t heard anything from the federal government about that. We’ve got this competition report that was, you know, a long time in coming. And the question was, well, when this finally came out, what’s the government gonna do with it? The, basically the report came out and said, yes, we see too much concentration, the grocery market and the competition bureau, by the way, is not the, some Bolshevik student union, it’s a federal agency. , their recommendation was a number of incentives to encourage more diversity within the grocery sector. Haven’t heard anything from the federal government on that. So the question of, you know, what’s government gonna do? Why did they wanna do something that would sort of be popular? It’s about where do, do their interests lie? And any federal government is always going to be, more often than not, siding with large corporations than with individual taxpayers. I think they sent out some checks and successfully probably bought a few votes with that. But I don’t see any suggestion that there’s a desire for meaningful action on this file.

Jordan: What happens here if nothing does change, if the, the grocery subsidy is it, and there are no measures to encourage more competition or halt prices where they are or any of that, does this keep trending in the wrong direction? You mentioned inflation as a whole is kind of slowly going back down. Is this something that resolves itself or are we just now too radicalized against big grocery? Maybe

Corey Mintz: There’s certainly a lot of public ill will towards large grocers, but I don’t see this being a campaign issue until things become something that’s like you can really hang a vote on. You don’t get action from government, right? There has to be that political will there and the perception of doing something radical, not as radical as breaking up large oligos, but something is, I think a bit more moderate and doable as actually instituting regulations for how they’re supposed to run their business and treat all the stakeholders in the supply chain. I don’t see that on the table, and I think there’s a lot of fingers crossed, hoping that things will level off. And I hate to prognosticate because your likelihood of being wrong is about a hundred percent. But you know, the one thing I don’t hear politicians saying, but I know is true, is as North Americans, we actually spend less on groceries than most people around the world, right? Between all the processed junk we buy and a lot of the government subsidies that keep, you know, soy and corn prices low, despite how much we complain about grocery prices and their increase, we actually spend less of our own income than most people in the world on groceries. And I can see politicians embracing that as a talking point. Like rather than doing something about it, trying to pivot to saying, well, we still have it better than Brazil, or who, I’m picking a name out of a hat

Jordan: Here. Don’t you people know how good you have? It is always a strong talking point. .

Corey Mintz: Yeah, I mean, I feel like as a parent, I may have defaulted that a couple times and then felt bad because it’s a really sort of intellectual dead end street. But I just look at, I look at gas prices and I only have been driving a car for a few years. You know, I rode a bicycle until I was in my forties. I got my licence in my thirties, moved from Toronto to Winnipeg a few years ago and needed a car here, bought a car, never noticed what gas prices were until I was a car owner. And then I was in the middle of the pandemic and I saw gas prices go from I think about a $1.25 up to about $2.00. And every step of the way, a constant public conversation about, can you believe it’s up another 5 cents, 10 cents? And then things eventually kind of scaled back down to around exactly where I live, a $1.57 now, still, I don’t know, 30% higher than they were, but I don’t hear any conversation about it. And I would expect food prices to kind of follow the same trajectory, like a, a lot of finger wagging and, and, and, and hand clenching at every nickel and dime. And then once we kind of peak, if we can just plateau people going, we don’t have to talk about it anymore. We’ve just accepted that it’s more expensive, even though that to a whole lot of people, that means me making different choices about what they can afford to eat, which the majority of the time is gonna be less nutritious food because it’s the, that fresh produce, it’s fruits and vegetables that are so much more difficult to offer at an affordable price, and is more often than not gonna be the kinds of ingredients people see steer away from, in short, in favour of cheaper alternatives.

Jordan: I wanna ask you about a different perspective now. So far, we’ve approached this from, you know, the average household shopping for groceries. You obviously write a lot about restaurants, including a whole book about them. And we’ve talked on this show before about how thin those profit margins have gotten during the pandemic. How has the past year plus of food inflation hit the restaurant industry?

Corey Mintz: It’s, you know, the, the restaurant rest tours are a strange breed of people. I mean, similar to farmers in the sense that like, they just keep getting assaulted by meteors and, you know, like space and invaders and flaming hail and every step of the way they’re like, you know, we probably one more thing goes wrong, we gotta get out of this business. And more things just keep going wrong and they never get out of the business because they love it and it’s, it’s what they do, but there’s just a constant stream of things that make running a restaurant challenging and unaffordable or, or unprofitable. And they keep doing it. And, you know, I clever rest tours have figured out different ways to do things. Limited service offering more of a prefix, shorter menus as prices go up, finding ways to control the menu in ways that waste less, expose them to less risk, make them able to manage staff in a more sustainable way. You know, having people like a concentrated times a day, or in the case of like big restaurant chains, I mean, their, their market, their margins are just thicker as it is, you know, and many people in the middle of have gone out of business that’s there. That’s, that’s another solution in that industry.

Jordan: Last question, because I always ask this when we’re talking about food prices. Do you have any tips for grocery shopping? I mean, you’re a food writer. How can people save some money during this crunch time?

Corey Mintz: I can only tell you how I shop for groceries, and I believe it’s efficient. I can’t say this works for everybody, but I sit down on the weekend at some point, you know, when my wife is with my daughter and I have some free time, and I, I menu plan for the week. I, I go over, you know, get ideas from cookbooks or I get my New York Times five recipes they send out every week or ideas from social media, or I have a file called Wife Meals stuff I know my wife likes, and I plan out my menu for the week. And I use that to plan out my shopping for the week. And so when I go to the grocery store, which I used to enjoy a lot more than I do these days, it’s in an organized fashion. I’m not impulse buying everything. I’m not going, Ooh, maybe that would be good to eat tonight. And I just, I know the same as with restaurants, when you’re really planning out, here’s everything we’re gonna need and I’m gonna get it, you’re wasting less because you’re shopping in a more controlled fashion.

Jordan: That is a great tip. And Corey, thank you for this. And we’ll see if the federal government will reveal whose side they’re on. Eventually,

Corey Mintz: As we love to end stories with journalism, only time we’ll tell

Jordan: Corey Mintz our favourite food reporter. If you haven’t read the Next Supper yet, it is a great book, especially if you love restaurants and dining out. That was the big story. You want more from us? Head to the big story podcast.ca. There’s an interview with Corey about his book there. If you wanna listen to that, just search for his name. And of course, you can always get in touch with us. We’d love to hear from you. You can find us on Twitter at the big story fpn. You can email us. The address is hello at the big story podcast.ca and you can call us. The phone number is (416) 935-5935. We won’t answer personally, but you can leave a voicemail. Thanks for listening. I’m Jordan Heath-Rawlings. We’ll talk tomorrow.