Loblaw calls out ongoing ‘outsized’ price hikes from big brand-name food companies

Canada’s largest grocer says its product costs have risen by nearly $1 billion so far this year — double the historic norm — as it continues to see “outsized” price increases from big multinational food brands.

But the head of one of Canada’s biggest food supplier industry groups says manufacturing costs are continuing to rise, and the opportunity to make a fair margin “should not be only in the domain of the retailers.”

Michael Graydon, CEO of Food, Health & Consumer Products of Canada, said on Wednesday that labour, packaging, distribution and regulatory requirements all add to the cost inflation in food manufacturing.

Moreover, many of the commodities in use now come from inventory or supply contracts negotiated when prices were higher and are still being passed through the supply chain, he said.

His comments come after Loblaw Companies Ltd. said cost hikes from suppliers appear out of sync with the commodity cost environment, and are contributing to elevated food inflation in Canada.