Letters from CAMP: No Name No Thanks
Canadian Anti-Monopoly Project
CAMP is fighting for a more democratic economy
Welcome to Letters from CAMP, a newsletter on anti-monopoly activity in Canada and abroad, brought to you by the Canadian Anti-Monopoly Project. In this installment we have:
Let's dive in.
No Name, No Game: Loblaws’ Discount Ploy
Loblaws' new ultra-discount "No Name" stores are less about bringing real competition to Canada's grocery sector and more about protecting the company's dominant market position. While new CEO Per Bank touts potential 20% savings compared to other discount stores, CAMP sees a familiar flanker brand strategy to crowd out genuine competition.
The new stores' limited hours, sparse product selection, and lack of fresh items reveal Loblaw's true priorities. By strategically placing these stripped-down outlets, the grocery giant aims to capture price-sensitive shoppers while preserving margins at its full-service locations. Canadians might be more willing to believe Loblaws was giving them a true low-cost option if the company hadn’t recently moved to reduce discounts on soon-to-expire food items.
Real competition would drive sustained price reductions across Loblaw's entire operation, not just a handful of goods at stores that open late and close early. Instead, we're simply seeing an attempt to segment the market and maintain overall profitability. As Canada's largest grocer, Loblaws has real power to meaningfully impact food affordability. This No Name venture suggests they're more interested in protecting their bottom line than helping cash-strapped consumers.
Flanker brands are a tactic employed by dominant players to create the image of competition in a variety of sectors, but Canada needs real change rather than marketing ploys to foster genuine competition in our concentrated grocery sector. Without that, Loblaws’ new stores are a change in name alone.
U.S. Chicken Farmers Win Nine Figure Antitrust Settlement
The recent $100 million settlement between Pilgrim's Pride and U.S. chicken farmers highlights a troubling reality: concentration issues plague all levels of our food system. From globally concentrated input suppliers to the few processors and retailers who dominate store shelves, farmers find themselves squeezed from all sides.
This settlement, addressing claims that major poultry processors conspired to underpay farmers, is just the tip of the iceberg. It reveals how monopolistic practices in agriculture extend far beyond the grocery aisle, impacting the producers who form the backbone of our food supply. The situation mirrors challenges faced by Canadian farmers. Caught between a handful of powerful agribusiness conglomerates and an increasingly concentrated retail sector, our agricultural producers struggle to secure fair prices for their labor, investment, and risk-taking.
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A comprehensive approach to fostering competition throughout the entire food supply chain is needed. This means scrutinizing mergers not just among retailers, but also among the firms supplying and buying from farmers. Policymakers must consider the cumulative impact of concentration on not just consumer prices but also the role of vulnerable producers.
Rather than simply pushing for the lowest cost end product, competition at every stage of food production is essential for a healthy, resilient agricultural system that serves both producers and consumers.
Algorithmic Manipulation: Amazon, Landlords and Gas Stations
Move over, smoke-filled rooms. A growing trend CAMP has been tracking is the use of algorithms to manipulate the markets around us and facilitate collusion.
At the forefront is Amazon, whose advertising practices on its marketplace have come under scrutiny. Recent research by Mariana Mazzucato reveals how the e-commerce giant leverages its algorithmic power to extract what they term "attention rents." By prioritizing sponsored products in search results, Amazon exploits users' tendency to click on top-ranked items, regardless of relevance. This strategy has led to a quarter of first-page results being advertisements, with nearly half of these duplicating organic listings. Here Amazon follows in the footsteps of Google in degrading the quality of its product once its stranglehold has been established.
But algorithmic market manipulation is not just the domain of digital giants. Companies are producing software that lets even small time landlords get in on the game. This week the U.S. Department of Justice filed an antitrust lawsuit against RealPage, alleging that its property management software facilitates price fixing in the rental property market. The DOJ claims RealPage's algorithm enables landlords to share sensitive pricing information and align their rents, driving the cost of housing higher for millions of American renters.
Thankfully enforcers up north are cluing in to similar trends in Canada. Early this year the Competition Bureau announced it was investigating Kalibrate, a provider of analytics and pricing guidance to gas stations. Similar to the RealPage case, the concern here is that Kalibrate's services might be facilitating coordination between competing gas stations, potentially inflating one of the most politically sensitive prices in the economy.
Canadians cannot have the cost of living raised by stealth just because some economists claim it is efficient. We need more assertive investigation of how algorithmic market manipulation is killing competition and greater transparency from companies about their use of these programs. Algorithms are no excuse for collusion.
If you have any monopoly tips or stories you'd like to share, drop us a line at [email protected]