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SKUFood ideas for change in our industry
The food and beverage industry is one of the most challenging sectors in the economy. Everyone has to eat, but there are so many hurdles to overcome to operate a successful food and beverage business. At SKUFood, our job is to help you get there. If we can work together to get your products on the shelf and into the shopping cart, we are doing our job.
The Competition Bureau in Canada released a Retail Grocery Market Study. It is positive they are looking at the sector. They had some conclusions and recommendations. There are a few good ideas, but they will never create the change needed in the industry. At SKUFood we have some ideas for them to consider:
- Put resources/investments into distribution. It is a major cost of food in this country, and we have to believe more than other countries. Our relatively low population and diverse geography over six time zones do make distribution a challenge. Support small to medium sized processors to help them get their products to market.
- Explore Canadian content rules within categories. This will force large retailers to carry products produced here. This reduces their leverage and ability to just bring something cheaper from somewhere else. This also improves food security and reduces our dependence on other countries to produce our food.
- Revisit Safe Food for Canadians Act. Create more realistic market sizes for producers and processors. Provincial markets are fine in the three largest provinces. Manitoba, Saskatchewan and Alberta should be a market as should be Atlantic Canada. We believe the reason is risk so why not make it fair? Ever tried to build a food business limited to Prince Edward Island? This would give processors a better chance at success and more leverage with retailers.
- Consider tax breaks for Canadian food and beverage businesses. We understand why entrepreneurs might want to sell to the big players, but our food industry is better with them in it. If the chance to generate a better return was there with lower taxes for more years in business, we might keep more people in the industry.
- Put Canadian producers and processors on a level playing field. We have robust food safety and labelling regulations in place. These are good but they cost money. Force importers of record to ensure products coming into the country meet or exceed the same regulations.
- Implement the food and beverage industry Code of Conduct. There is too much power in the hands of the retailers. We have laws to govern how commerce is conducted but we need an independent body to arbitrate disputes. Retailers continue to leverage their position with the power to limit sales of suppliers.
- Change legislation to address consolidation. Presently the competition bureau cannot stand in the way of acquisitions or mergers in the largest markets because these are the most competitive. Unfortunately, when we lose regional retailers, it changes the dynamics across the country.
- Change property control legislation. This is one recommendation from Competition Bureau we agree with. Large retailers can limit competition with non-compete clauses. We need more small to medium sized retailers, not less.
We work with small to medium sized producers and processors. We want to see you succeed in the current environment and to drive positive change in our industry. We understand both sides of the desk. We will put our knowledge to work for you to drive more sales and help you develop prosperous relationships with retailers.
Peter Chapman
Retail Marketer, Author, Speaker & Consultant
Peter Chapman
peter@skufood.com
(902) 489-2900
294 Glen Arbour Way
Hammonds Plains
Nova Scotia, Canada B4B 1T6
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