Canadians have strong opinions about grocery prices. The Competition Bureau knows it, and it has now announced that it will be examining competition across Canada's food supply chain, from farm to checkout lane.

While this is not a market study or a formal law enforcement investigation, businesses should not shrug it off as yesterday's leftovers. The Bureau has expressly indicated that, if it finds evidence of anti-competitive behaviour, it may investigate and take appropriate action. The Bureau has therefore effectively published a preview of the practices and sectors it intends to scrutinize in the years ahead.

The Bureau's review will focus on three key areas:

  • Production and processing: How food is grown, produced, transformed, and packaged;
  • Transportation and distribution: How food moves through the supply chain; and
  • Retail pricing practices: Including loyalty programs, pricing algorithms, shrinkflation, and skimpflation.

The Bureau is seeking input from Canadians and organizations with experience in the food supply chain by July 31, 2026. It has also indicated that it will meet with groups and hold roundtable discussions in the coming months, with a final report expected in spring 2027.

Why should businesses care?

The Bureau has not announced any new legal requirements. However, the practices highlighted intersect with existing provisions of the Competition Act and provincial consumer protection laws, offering a useful roadmap of where future scrutiny may be headed.

The announcement also lands against a broader federal policy backdrop. The federal government recently launched its National Food Security Strategy, which emphasizes food affordability, domestic production and processing, supply chain resilience, and increased competition throughout the food ecosystem. That context makes the Bureau’s review more than a standalone announcement: it is part of a broader public policy focus on how food is produced, moved, sold, and priced in Canada.

A few items that appear to be particularly ripe for review:

Automated pricing and pricing algorithms

The use of pricing software and algorithms is not currently prohibited. However, businesses should be mindful of competition law risks where pricing tools facilitate coordination between competitors, reduce independent decision-making, or otherwise lessen competition in a market.

In other words, while dynamic pricing may help businesses stay competitive, the Bureau may take a dim view if competitors' pricing starts looking a little too perfectly synchronized.

Additionally, businesses using pricing algorithms or dynamic pricing tools should ensure their pricing strategy is not a recipe for regulatory scrutiny, and consider whether they:

  • Understand what data the tool uses and how pricing recommendations are generated.
  • Maintain independent pricing decision-making.
  • Avoid sharing competitively sensitive information through third-party platforms or vendors.
  • Test for unintended pricing patterns or discriminatory outcomes.
  • Document the business rationale for pricing practices.
  • Ensure legal, compliance, and business teams are involved before pricing tools are deployed or materially changed.

Loyalty programs

Loyalty programs remain a valuable way to build customer engagement, but businesses should ensure that the rules of the game are clearly disclosed.

Terms and conditions, point accrual rates, redemption restrictions, expiry policies, and promotional offers should be accurate, understandable, and readily available. The Bureau has increasingly focused on whether consumers receive all material information necessary to make informed decisions before they buy.

It’s also worth noting here that some provinces have adopted legislation specifically regulating loyalty programs. Notably, these restrict a merchant’s ability to expire points and to make certain changes to a program. Québec has gone further in the food pricing context, introducing specific transparency requirements for food products, including how merchants display non-member prices, loyalty-member prices, unit prices, and prices for bundled products.

While these are provincial requirements and therefore outside the Bureau’s direct enforcement mandate, the takeaway for grocery and food businesses is that loyalty pricing and promotional offers should be reviewed through both lenses: federal competition law and provincial consumer protection law.

Shrinkflation

Reducing the size, weight, or quantity of a product is not inherently unlawful. What matters is whether consumers are given an accurate impression of what they are purchasing.

If a bag contains fewer chips, businesses should ensure that packaging, pricing claims, and other representations do not leave consumers feeling like they got more air than appetizers.

Skimpflation

Similarly, reducing a product's quality, ingredients, features, or benefits is generally permissible. The legal risk arises when advertising or packaging creates a misleading impression about what consumers are receiving.

While consumers may tolerate recipe changes, they are less likely to appreciate discovering that the "same great product" is missing a few key ingredients.

Supply, distribution, and market access

The Bureau’s focus is not limited to what happens at the cash register. Businesses should also consider whether supply, distribution, logistics, category management, exclusivity, information-sharing, or other commercial arrangements could affect how products move through the food supply chain or how competitors access customers. Arrangements that are ordinary-course and efficiency-enhancing may still attract questions if they appear to restrict market access, limit independent decision-making, or create barriers for smaller or emerging competitors.

A quick compliance gut check

For businesses operating anywhere in the food ecosystem, now may be a good time to take stock before deciding whether to respond to the Bureau, participate in roundtables, or prepare for potential follow-up questions. Consider asking:

  • Do we use pricing algorithms or automated pricing tools, and do we understand the data inputs, outputs, and governance controls?
  • Do any pricing tools use competitor data, third-party data, or shared vendor inputs in a way that could reduce independent pricing decisions?
  • Are our loyalty program terms, conditions, promotional claims, point values, redemption restrictions, and expiry policies clear, current, and accurate?
  • Have product sizes, quantities, ingredients, features, or quality changed without corresponding updates to advertising, packaging, or consumer-facing claims?
  • Are there any commercial arrangements that could be perceived as limiting competition or market access?
  • Do our supply, distribution, logistics, or category management arrangements include exclusivity, most-favoured-nation clauses, restrictive covenants, information-sharing provisions, or other terms that could affect market access?
  • If the Bureau seeks input from us, do we know who will coordinate the response and what business information we would be comfortable providing?

If any of these questions leave a bad taste in your mouth, it may be worth taking a closer look.

The bigger picture

The Bureau has made grocery affordability a key priority and has increasingly focused on barriers to competition across the Canadian economy. Businesses should therefore expect heightened scrutiny not only of retail pricing practices, but also of commercial arrangements that may affect how products move through the supply chain.

The silver lining? The Bureau has essentially handed businesses the recipe for what it plans to examine. Organizations that review their practices now will be better positioned if scrutiny increases later.

As the Bureau continues its work, food producers, manufacturers, distributors, retailers, and technology providers should ensure that their pricing tools, promotional claims, product-change controls, supply and distribution arrangements, and competition compliance programs are ready for a closer inspection.

If any of the Bureau's priorities sound familiar, our Advertising & Product Regulation team can help you assess potential risks before they become the Bureau's next food for thought.