Canadian grocers face surcharges
At least four Canadian food suppliers are adding fuel surcharges for deliveries to grocery stores, moves that some retailers say could soon show up in consumer prices (cbc.ca). Retailers are reportedly weighing whether to pass those costs directly to shoppers or absorb them for now (cbc.ca).
Major Canadian food suppliers have started adding fuel surcharges to grocery deliveries, pushing a new cost into a food chain that was already under strain. (cbc.ca) CBC News reported that at least four suppliers — Sunrise Farms, CTS Foods, Maple Leaf Foods and Tree of Life — sent notices to grocery customers as diesel prices climbed. Maple Leaf told clients on March 31 that it would charge an extra $0.11 per kilogram on prepared meats and fresh poultry starting April 6. (cbc.ca; globalnews.ca) Tree of Life said in a March 23 letter that it would add $10 per shipment starting April 22 and remove the fee if diesel fell back to a rolling three-month average of $1.20 a litre or less. GasBuddy data cited by Global News put Canada’s average diesel price at $1.78 a litre on April 15. (globalnews.ca) The immediate fight is over who pays. Empire, the parent company of Sobeys and Safeway, told CBC it was refusing the charges, while smaller independent grocers said they often lack the leverage to say no. (cbc.ca) Independent grocers operate on thin margins, and the Canadian Federation of Independent Grocers said many stores run at about two per cent. Gary Sands of the group said higher supplier fuel bills will be passed through the chain and that rural, remote and refrigerated shipments could be hit harder. (grocerybusiness.ca) The timing lands in a market where food inflation has not fully disappeared. Statistics Canada’s food price hub tracks the consumer price index for food purchased from stores, the category that covers grocery retailers and independent stores. (statcan.gc.ca) The surcharge letters tie the increase to crude oil and diesel spikes linked to turmoil in the Middle East and shipping pressure around the Strait of Hormuz. CBC and Global both reported suppliers describing the fees as temporary responses to transportation costs rather than broad price hikes on ingredients or packaging. (cbc.ca; globalnews.ca) Canada’s new grocery code is now part of the dispute. On April 13, the Office of the Grocery Sector Code of Conduct reminded members that surcharges count as supplier cost changes, cannot be imposed by altering contracts unilaterally, and must follow agreed notice and negotiation rules. (canadacode.org) The federal government also moved on fuel costs. Grocery Business reported that Prime Minister Mark Carney announced on April 14 a temporary suspension of the federal fuel excise tax, with the change set to start April 20 and run until September 7; the same report said Ottawa expects a cut of 10 cents a litre for gasoline and four cents for diesel. (grocerybusiness.ca) For now, the surcharge is still mostly a business-to-business fee on a delivery invoice. The next test is whether big chains keep resisting, whether independents absorb any of it, and how quickly a temporary line item turns into a higher shelf price. (cbc.ca; canadacode.org)
