Walmart, Costco to Work on Plan to Curb Food Inflation, Canada Minister Says

(Bloomberg) -- Executives of five large grocery chains including Walmart Inc. agreed to work with the Canadian government on a plan to stabilize food prices, the country’s industry minister said.

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Francois-Philippe Champagne said he held a “constructive” meeting Monday with senior executives from Walmart, Loblaw Cos., Metro Inc., Empire Co. and Costco Wholesale Corp. to discuss how to temper rising prices. Food inflation was nearly 8% in the past year.

“These were difficult discussions that lasted almost two hours,” Champagne said. “I told them in no uncertain terms the feelings of millions of Canadians who want to see action.”

Prime Minister Justin Trudeau’s government announced last week that Champagne would demand a short-term plan on food prices from the supermarket chains or hit them with unspecified tax measures. Trudeau’s Liberals have been sinking in the polls as Canadians struggle with the rising cost of groceries and housing.

Five senior executives — Loblaw’s Galen Weston, Metro’s Eric La Fleche, Empire’s Michael Medline, Walmart Canada’s Gonzalo Gebara and Costco’s Gino Dorico — attended the meeting in Ottawa.

Champagne did not define what “price stability” means to the government, but he pointed out that food costs are rising at a faster pace than the overall rate of inflation, which was 3.3% in July. He also said the government would work with food manufacturers on prices.

“We’re going to continue to fight for Canadians because that’s what they expect us to do over the next few weeks,” he said.

The Retail Council of Canada, which represents grocery stores, has said price increases have been driven by higher vendor costs from food manufacturers and producers due to supply chain challenges, Russia’s war in Ukraine, fuel prices and climate events.

During the meeting, there was “alignment that any discussions on food prices must include all members of the complex supply chain,” Michelle Wasylyshen, a spokeswoman for the council, said in an emailed statement.

“This is something that we have called for consistently, given that 70% to 80% of grocery checkout prices arise before the food even gets to Canada’s grocers. To that end, Minister Champagne has now committed to calling in these groups for discussions with respect to their role in food pricing,” she said.

--With assistance from Brian Platt and Mathieu Dion.

(Updates with comment from Retail Council of Canada)

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