Competition Bureau investigates minimum advertised pricing policies in grocery sector

The Competition Bureau has launched an investigation into the use of minimum advertised pricing policies in the grocery sector, rules that can prevent retailers from advertising their lowest prices in flyers, apps and online promotions.

The watchdog is examining whether the policies make bargains harder to find, blunt competition among grocers, and put new and discount stores at a disadvantage.

“Canadians expect grocery stores to be able to advertise their best deals,” Jeanne Pratt, the agency’s interim competition commissioner, said in a statement Monday. 

“We’re concerned that policies that prevent this make it harder for grocers to compete, and for consumers to access lower prices,” she said. “At a time when food affordability remains an important concern for Canadians, we want to hear about how these policies are affecting grocery prices and consumer choice.”

Minimum advertised pricing policies set a floor on the price retailers can advertise a product for, although they may still be able to sell it for less. 

In the retail industry, suppliers may use advertised price rules to protect a brand’s image or to help smaller grocers compete.

The Competition Bureau gave a fictional example of a supplier setting a minimum advertised price of $2.99 for a package of pasta. A discount grocer might sell it for $1.99, but could not advertise the lower price, making the deal harder for shoppers to find and potentially discouraging the retailer from offering it in the first place.

“Suppliers will have an interest in, for a variety of reasons, keeping a sort of minimum price for their goods that can be advertised,” said Keldon Bester, executive director of think tank Canadian Anti-Monopoly Project.

“These practices can soften the price signals that drive competition, particularly for discount operators,” he said. “They can lead to a homogenization of prices.”

The bureau is asking industry participants and consumers to come forward with evidence of minimum pricing use.

It says the information it receives will support its investigation and inform its examination of competition across Canada’s food supply chain.

In June, the agency launched an investigation of competition in the grocery sector, including potential problems in production, processing, transportation, distribution and pricing.

Minimum advertised pricing policies are a form of price maintenance, a broader practice in which suppliers seek to influence the prices retailers sell or advertise their products for.

“This isn’t the retailers, this is their suppliers setting the minimum advertised price and it’s in their sales contracts,” said Mike von Massow, a professor of food agricultural and resource economics at the University of Guelph. “It is a requirement when they buy certain products.”

The practice is more likely to be used for recognizable or premium brands than staples such as milk or produce, he said, in part because price can shape consumers’ perception of quality.

“There are some products for which a higher price is actually better for demand than a lower price because of this perception of quality,” von Massow said.

But imposing a minimum advertised price can backfire if shoppers are willing to switch brands.

“If you say to a grocer, ‘You can’t put this in a flyer for cheaper than this,’ then they can put a competitive product or a substitute product in instead,” he said.

Meanwhile, the Canadian Federation of Independent Grocers cautioned that restricting minimum advertised pricing could have unintended consequences.

Gary Sands, senior vice-president of public policy and advocacy for the industry group, said the practice can protect independent grocers because large chains generally have greater leverage to negotiate lower prices from suppliers. 

Without advertised price floors, he said, big retailers could use that advantage to promote prices smaller competitors couldn’t match.

“This is a race to the bottom, but we won’t even be invited to the race,” Sands said. “We’ll just be run over.”

Although eliminating minimum pricing could be cheaper for consumers in the short term, Sands argued it could ultimately weaken competition, raise prices and reduce choice, especially in rural and remote communities.

“We see this as perhaps a short-term gain (for consumers) but certainly long-term pain,” he said. “It will impair the ability of independent grocers to stay on that playing field.”

This report by The Canadian Press was first published Sept. 28, 2026.