‘Chickengate’ exposes the crisis of confidence grocers face today

By Sylvain CharleBoiS

It all started with one reporter taking a simple, trivial picture of an overpriced pack of five boneless, skinless chicken breasts. The cost was $26.87 a kilo, a world-class sticker shocker, at least double what one would expect to pay for chicken breasts.

Within hours, the picture became the lightning rod for frustrated consumers on social media.

Loblaw and Galen Weston – the company’s Chairman, President, and well-known public persona of the company’s brand – became public enemy number one. Attacks were instant, and mostly vicious.

For months now the poultry industry, including egg producers, has been challenged by an avian flu outbreak, affecting almost 300 farms across the country. Many of them are in Ontario. Almost five million birds were culled in the last year, preventing millions in inventory from reaching the market. Supply-side pressures have been significant for a while. As such, prices for chicken, turkey, and eggs have all been impacted by the outbreak.

What also needs to be underscored is that chicken production is supply-managed in Canada. With our quota system, we essentially produce what we need and consume very little imported poultry products. According to Statistics Canada, the average net worth of a poultry and egg farmer in Canada is well over $6 million. Farmgate prices are set by boards which, in turn, are heavily influenced by production costs. In most years, farm prices will go up and the rest of the supply chain will cope with supply chain economics.

That’s how supply management works. Poultry and egg prices have historically been higher in Canada than elsewhere in the Western world. Nonetheless, supply management has offered Canadians stable prices. In fact, chicken has been the more stable component of the meat trifecta, which also includes pork and beef. But since early 2020, the meat counter has increasingly become expensive, no matter what protein you are after. Many of these factors are far beyond Loblaw’s control.

The last time Canada’s food inflation rate was below our nation’s general inflation rate was in October 2021. While everything in our lives got more expensive, it got significantly worse at the grocery store.

Consumers are actively looking for a scapegoat, one they can relate to. Most consumers barely appreciate how farming, logistics, or even food processing works, but most of us have been to a grocery store. It’s a familiar environment for most of us. Grocery stores are portals to a very complex food system we can barely see and understand, so promptly blaming grocers for overpriced products is instinctive.

Canada has one of the