In a bold move that underscores the intensifying battle between retailers and manufacturers over pricing, Loblaw Companies has removed Folgers coffee products from its store shelves across Canada. The decision comes amid an escalating dispute over what Canada’s largest grocery chain describes as “unjustified price increases” demanded by J.M. Smucker Co., the parent company of the iconic coffee brand.
“We’re standing firm against price increases that cannot be justified,” said Catherine Thomas, Loblaw’s senior director of external communication, in a statement provided to CO24 Business. “When a supplier demands higher prices without valid justification, we have a responsibility to our customers to challenge those increases.”
The removal affects all Folgers coffee products in Loblaw-owned stores, including Shoppers Drug Mart, No Frills, Real Canadian Superstore, and other banners across the company’s nationwide network. Industry experts suggest this dispute represents more than just a temporary disagreement over pricing, but rather signals a fundamental shift in retailer-supplier power dynamics in Canada’s increasingly concentrated grocery sector.
Retail analyst Bruce Winder notes that this confrontation comes at a particularly sensitive time for Canadian consumers. “With grocery inflation having run at elevated levels for over two years, retailers are under immense public pressure to hold the line on prices,” Winder told CO24. “Loblaw is essentially telling suppliers that the days of passing along arbitrary price increases are over.”
J.M. Smucker Co. has defended its pricing strategy, claiming that persistent inflationary pressures on raw coffee beans, packaging materials, and transportation costs have necessitated adjustments. In a written response, the company stated that its “pricing actions reflect the economic realities of the global coffee market and are in line with industry standards.”
This is not the first time Loblaw has removed products during pricing disputes. In 2022, the retailer temporarily pulled certain Frito-Lay products from shelves during similar negotiations. However, the current dispute occurs against a backdrop of heightened scrutiny of Canada’s grocery sector, with federal investigations into food pricing practices and growing consumer frustration over high food costs.
Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, believes this confrontation highlights deeper issues within Canada’s food supply chain. “We’re witnessing a fundamental power struggle,” Charlebois explained. “With just five companies controlling over 80% of food retail in Canada, suppliers are increasingly finding themselves in take-it-or-leave-it negotiations.”
For consumers loyal to Folgers, alternatives remain available at competing retailers such as Metro, Sobeys, and Walmart. Some industry observers suggest this temporary removal may actually benefit competing coffee brands like Maxwell House, Tim Hortons, and Loblaw’s own President’s Choice coffee products, which remain available across the company’s stores.
The timing of this dispute coincides with the federal government’s development of a grocery code of conduct aimed at establishing fair business practices between retailers and suppliers. The grocery code, expected to be implemented later this year, could potentially provide a framework for resolving such disputes in the future.
As this situation unfolds, the fundamental question emerges: in an era of heightened sensitivity around consumer food prices, who should ultimately determine what constitutes a “justified” price increase – the manufacturer, the retailer, or perhaps government regulators acting in the public interest?
