About 20 years ago, P.E.I. farmer Rose Viaene watched her husband David take their tractor out into their farm fields and destroy their garlic crop — an act of defiance born out of frustration with Canada’s large grocery chains.
Viaene said before then, their garlic was sold across Atlantic Canada, including at Sobeys and Real Canadian Superstore. But that relationship changed when grocery retailers began importing cheaper garlic from China.
The large retailers were still open to buying garlic from the farmers, but Viaene said the offer was too low — just 50 cents per pound when it cost the farm $7 per pound to produce.
“We were at the mercy of the big corporates or the buyers at that time,” Viaene explained.
But rather than take the offer and eat the loss, they couple refused.
“Hell no, we’re not going to do it,” she recalled deciding. “We’re not going to let them make the money and us go see the bank again for another winter to support us. No, we weren’t going to do that.”
Jenn Pfenning, president of the National Farmers Union, said that same frustration the Vianaes felt toward Canada’s large grocery retailers “is repeated multiple times a day, every day across the country.”
“The concentration of power with such a small number of organizations in terms of retail food space really means that there is no farmer in Canada who actually has the weight to balance the power that they hold,” Pfenning said. “And [the retailers] really do dictate extremely effectively what a product can be sold for.”
The Carney government’s national food security strategy, which acknowledges that 75 per cent of Canada’s grocery sales are made by just five retail chains, is trying to both empower farmers and cut into grocery consolidation by pledging a 10-year, $1-billion fund to establish as many as 40 local food hubs across the country.
While experts acknowledge this proposal can help wrest control from large grocery chains, some doubt it will help Canadian consumers reduce their food bills.
Prime Minister Mark Carney announced a new $3-billion national food security strategy to combat issues in the Canadian food system in Toronto on Thursday.
Ann Higgs, who runs a food hub called Growers Station in Charlottetown, told CBC’s The House that clients including restaurants, community groups and small grocers can submit orders to the hub, which then informs local farmers what they need to pack.
Growers Station then picks up the packages and distributes the food to its clients.
According to Higgs, food hubs like hers help smaller farmers who may be priced out of running larger operations due to land costs grow their businesses and establish closer relationships with local customers.
“We grow when our farmers grow, we improve when our farmers improve, and as a food hub we can do those unique things with the mid- and small-size farmers that the large grocers cannot,” Higgs said.
Among Growers Station’s clients is Krunal Patel, who runs Crapaud General Store on P.E.I.’s South Shore, about 30 kilometres from Charlottetown.
Patel bought the store in 2020, achieving a lifelong dream. Growers Station provides him with fresh produce, but he still needs to buy dry goods from wholesalers like TRA Atlantic, which is owned by Sobeys — his competition.
He told The House that in order to get a good price, small businesses like his have to purchase in bulk, but that’s more food than his customers need.
“Not only the price, [but] I need to think about the [sell-by date] as well because as a small store, I won’t be able to sell that many. So if [food] expires, I’m not going to get credit or anything,” Patel explained.
In a statement, Loblaw told CBC it has “built multi-generational relationships with growers and suppliers in P.E.I. and across Canada which we greatly value.”
“When sourcing products we need to always balance both the importance of our relationships and supporting local businesses with a range of factors including affordability for Canadians, available capacity, and assortment. It’s a responsibility we take very seriously,” the statement said.
Could food hubs help lower grocery prices?
Although a push for more food hubs across Canada will provide smaller grocers with extra avenues to get fresh produce, allowing them to be more competitive, University of Guelph food economist Mike von Massow told The House it’s “not going to reduce our grocery bills by a whole bunch.”
“It provides resilience and it’s a very good thing to do, but I think if we depend on it to lower grocery prices we are bound to be disappointed,” von Massow said.
According to von Massow, groceries are more expensive in Canada right now because of issues with the supply chain, such as poor growing conditions in Mexico that have driven up tomato prices.
Canada’s Competition Bureau says the problem with grocery prices is a lack of competition. Andrew Chang breaks down what led to the concentration in the industry, and proposes possible solutions to diversify the market.
Von Massow said he doesn’t believe it’s a case of “greedflation” or price gouging in Canada, but he said the extra funding in the government’s food strategy to strengthen the Competition Bureau is worthwhile.
“I’m reasonably sure it’s not going to reduce prices a whole bunch, but it should increase our confidence that we’re not being gouged at the grocery store,” he said.
Asked why the federal government is investing so much money into a food hub proposal that some experts doubt will cut grocery bills, Agriculture Minister Heath MacDonald told The House that part of the strategy is supporting critical infrastructure.
“I think it’s important that we try to do more here at home,” he said.
Giving people more places to shop opens the market, which drives price fluctuations, MacDonald said.
“I think having that opportunity to put more products locally on the shelf with less transportation costs, being able to create those hubs in regions that presently don’t have them … will drive competition. And when you drive competition you drive price, and you drive the price down,” he added.
Today, Rose Viaene and her daughter Trisha run the Riverview Country Market in Charlottetown, a year-round farmers’ market that features local produce and other goods.
The market has had its ups and downs, but Viaene and her daughter said it remains competitive by focusing on local success instead of profit.
“If you’re successful, we’re successful, too. And that’s the whole part of how we need to work together and come together,” Trisha Viaene said. “If Canada’s moving in the right direction, it is supporting these small local stores, giving us the ability to compete with these bigger stores.”
