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Project Hammer: reduce collusion in the Canadian grocery sector

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Re: Project Hammer: reduce collusion in the Canadian grocery sector

#241

Post by willhslade »

sofixa wrote: post #213
a13n wrote: post #84

Love this project. I just moved from Toronto, and compared to the US was frustrated by how every major industry in Canada was basically an oligopoly. In Canada if you look at telecoms, banks, insurance, grocers, airlines, etc – there are a few major competitors and that's about it. It's very difficult to start a competitor, often for regulatory reasons, and most smaller competitors end up getting bought out by the bi…

> In Canada if you look at telecoms, banks, insurance, grocers, airlines, etc – there are a few major competitors and that's about it. It's very difficult to start a competitor, often for regulatory reasons, and most smaller competitors end up getting bought out by the big guys. > As a result, they have crazy shitty experiences. Telecoms are frustratingly expensive for cable and mobile services. Banks are dreadful an…

https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_U... In the first quarter of 2024, there were 4,012 commercial banks and 556 savings and loan associations in the U.S. insured by the Federal Deposit Insurance Corporation (FDIC) with US$23.957 trillion in assets.[1]

Canada has the big 5 / 6 and then a lot of credit unions. Still not 1/10 as many as the good old USA, and that's one industry.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#242

Post by sofixa »

willhslade wrote: post #241
sofixa wrote: post #213

Earlier quoted context omitted.

> In Canada if you look at telecoms, banks, insurance, grocers, airlines, etc – there are a few major competitors and that's about it. It's very difficult to start a competitor, often for regulatory reasons, and most smaller competitors end up getting bought out by the big guys. > As a result, they have crazy shitty experiences. Telecoms are frustratingly expensive for cable and mobile services. Banks are dreadful an…

https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_U... In the first quarter of 2024, there were 4,012 commercial banks and 556 savings and loan associations in the U.S. insured by the Federal Deposit Insurance Corporation (FDIC) with US$23.957 trillion in assets.[1] Canada has the big 5 / 6 and then a lot of credit unions. Still not 1/10 as many as the good old USA, and that's one industry.

> Canada has the big 5 / 6 and then a lot of credit unions

Can't you say literally the same thing about the US?

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#243

Post by jogjayr »

motohagiography wrote: post #121
jfil wrote: post #105

Earlier quoted context omitted.

I agree with you that Canada has a very unique attitude to competition - it's "Can't we all just get along?" Regarding food, I beg to differ. The top 3 grocers have price-fixed bread [1] (one prosecution since that article), wage-fixed [2] and have no-compete agreements for certain times of the year [3]. Food prices are not driven by underlying costs here. 1. https://www.cbc.ca/news/business/bread-price-fixing-loblaw…

as per the articles, the investigation that yielded guilty pleas for price fixing was 20 years ago, the current investigation has had no results so the CBC is just narrative churning there. that the "hero pay" was coordinated hardly amounts to wage fixing unless you are litigating like a union rep. Food prices are absolutely driven by costs, there is no other basis for them. Loblaws is a luxury retailer with a limite…

> Loblaws is a luxury retailer

Is that why they own the chain "No Frills"?

> with a limited set of stores

Only in the sense that it is a finite number of stores. Loblaw Companies is Canada's largest food retailer.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#244

Post by canadiantim »

randomdata wrote: post #188
canadiantim wrote: post #153

Earlier quoted context omitted.

Wheat is no longer government controlled in Canada, the wheat board was sold off back in 2015 and no longer is the sole purchaser.

The Canadian Wheat Board (CWB), which only ever served the prairie provinces, was sold off. The Ontario Wheat Board is still in operation (now known as Grain Farmers of Ontario) and declared an end to the single desk in 1999, which was phased out by the early 2000s. GFO continued to run an optional pool until the 2020 crop year, but that has now also come to an end. I can't imagine anyone was still using it. It was a…

Thank you for the context and info, good to know.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#245

Post by fakedang »

willvarfar wrote: post #203
fakedang wrote: post #199

Earlier quoted context omitted.

Monetization? I explored that idea before, but soon discovered it's hard to charge customers already looking to save money. Yet unfortunately, what's easier and more lucrative is selling that same data to the retailers to keep your lights on.

Perhaps this could be an unmonetized activist-programmed app. Or, with big VC backing, in some markets you could set up a mail-out retailer that is just undercutting shelf prices. You have the data on who is buying what and how much they are paying, and you are providing the organisational glue for community group buying and stockrooms, so you could be getting into being a virtual supermarket without renting any reta…

Explored that idea also.

The fact is that the majority of big brand retailers do not make most of their revenue from selling products, but from selling shelf space. Margins on products are often very low, in the 2-5% ranges. But selling a single 1 meter length shelf space would generate thousands of dollars in revenue annually. That's not something you can charge for easily for an online store.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#246

Post by willvarfar »

fakedang wrote: post #245
willvarfar wrote: post #203

Earlier quoted context omitted.

Perhaps this could be an unmonetized activist-programmed app. Or, with big VC backing, in some markets you could set up a mail-out retailer that is just undercutting shelf prices. You have the data on who is buying what and how much they are paying, and you are providing the organisational glue for community group buying and stockrooms, so you could be getting into being a virtual supermarket without renting any reta…

Explored that idea also. The fact is that the majority of big brand retailers do not make most of their revenue from selling products, but from selling shelf space. Margins on products are often very low, in the 2-5% ranges. But selling a single 1 meter length shelf space would generate thousands of dollars in revenue annually. That's not something you can charge for easily for an online store.

The virtual supermarket doesn't have to stock everything. It can be very selective in what it identifies as something it can economically provide etc. It can be an esoteric mix of things it happens to have high enough margins on.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#247

Post by mb7733 »

islewis wrote: post #139
mb7733 wrote: post #135

Earlier quoted context omitted.

We know they have been colluding, the question is on what other kinds of goods? https://en.wikipedia.org/wiki/Bread_price-fixing_in_Canada

Thanks for the context. I'm still not certain that an instance of collusion on the price of bread in 2015 implies wider collusion in 2024. Ideally, the data would be proving this, but I guess my skepticism is the cost of making a claim before the research is done.

Your point stands, but it wasn't an "instance of collusion on the price of bread in 2015", but widespread collusion on the price bread and other baked goods from 2001-2015 (some say 2017), which was discovered in 2015.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#248

Post by willhslade »

sofixa wrote: post #242
willhslade wrote: post #241

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_U... In the first quarter of 2024, there were 4,012 commercial banks and 556 savings and loan associations in the U.S. insured by the Federal Deposit Insurance Corporation (FDIC) with US$23.957 trillion in assets.[1] Canada has the big 5 / 6 and then a lot of credit unions. Still not 1/10 as many as the good old USA, and that's one industry.

> Canada has the big 5 / 6 and then a lot of credit unions Can't you say literally the same thing about the US?

According to this, the big 5 control 89% of the banking sector in Canada, and 35% of the market share in the USA. https://www.visualcapitalist.com/canada-u-s-banking-differen...

Let's just agree to disagree.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#249

Post by mthoms »

hollerith wrote: post #230
mthoms wrote: post #229

Earlier quoted context omitted.

Your analysis of food price increases "in the last few years" doesn't mention the worst financial crises the country has faced in (at least) 80 years and the effect it had on inflation. It also doesn't mention the record corporate profits being recorded in several sectors. The profit margin of our largest grocery chain actually increased 50% during Covid for instance. Instead, your analysis is simply: "Government bad…

>The profit margin of our largest grocery chain actually increased 50% That's not exactly a strong indictment: when the average margin for the industry is about 1%, all kinds of things are going to cause this or that industry participant's margin to fluctuate up or down by a factor of 50%, i.e., to go down to 0.5% or up to 2%. It's not the same thing as Apple's margins, which last time I checked 12 years ago or so ho…

Except we're talking about Covid. When all input costs were skyrocketing (according to the grocers themselves). Accordingly, there were no magical cost-saying measures or new efficiencies unleashed.

That tracks with their financial statements (no new efficiencies).

So, the only way to increase profit margin when input costs are rising is to raise prices more than your costs are rising.

As an aside... Loblaw's margin is upwards of 3.7% not 1%. Before Covid it was around 2% (give or take) for over a half century. The grocery industry may have low margins but they were remarkably stable. Until Covid.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#250

Post by mistermann »

hluska wrote: post #225
mistermann wrote: post #214

Earlier quoted context omitted.

> I've worked as an economist at one of those government agencies. They are filled with keen PhD / MSc economists looking to bust kartels and find collusion. There is the skillset of the employees, and then there is what management allows employees to work on. A decade or so ago, a Statistics Canada senior manager was interviewed and claimed as fact that they were unable to reproduce an Excel model that analyzed the…

Can you put a link to the story about the Stats Canada manager? There was a story a few years ago about a Stats Canada employee who could not reproduce a model because of confidentiality reasons within CRA, but certainly you wouldn’t be getting confidentiality and privacy mixed up with competence. Can you put up a link?

https://www.theglobeandmail.com/canada/british-columbia/arti...

That article covers the initial report, not the subsequent claim that they do not have the ability to reproduce it.

> But the report was not made public until a five-year access-to-information battle concluded recently.

This demonstrates that Canadian democracy does not rule according to the will of the people - there was never a referendum on whether the government should hide the truth from citizens.

> Of the 46 houses bought in Burnaby, staff found 72 per cent were purchased by new arrivals to Vancouver who reported an average total family income of just $16,000.

Immigrate to Canada, enjoy all of its world class (at least formerly) social services, but pay no income taxes. Also not the will of the people.

Hanlon's Razor seems to be the guiding principle of journalists, and the general public in general. Gosh, I wonder if our educational curriculum (or lack of specific content) has anything to do with this state of affairs. Note also who it is that determines curriculum.

https://en.m.wikipedia.org/wiki/Hanlon%27s_razor

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