Loblaw, Sobeys push back after food suppliers request fuel surcharges
Loblaw and Sobeys say they’re pushing back against food suppliers who have notified them about adding fuel surcharges on grocery shipments.
The Globe and Mail and CBC News obtained notices sent by Sunrise Farms, CTS Foods, Maple Leaf, and Tree of Life — four of Canada’s major food suppliers — alerting their grocery clients of the fuel surcharges.
CBC News reported that Sunrise Farms said they would add a temporary five-cent-per-kilogram fuel cost adjustment, as well as a $10 fuel surcharge starting April 13. The per-kilogram rate would be adjusted biweekly based on “fuel market conditions.”
Maple Leaf’s letter stated that it would add a temporary 11-cent-per-kilogram fuel surcharge for all prepared meat and fresh poultry shipments starting April 6, reported CBC News. The letter reportedly said it was a response to the soaring oil prices amid the blockade of the Strait of Hormuz.
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As of Tuesday, the United States has begun its blockade of the Strait of Hormuz. The crucial passage way for one-fifth of the world’s oil supply was shut down by Iran’s new supreme leader, Mojtaba Khamenei, in March in response to strikes from the United States and Israel. This has caused oil prices and, therefore, gas prices to spike.
According to CBC News, CTS Foods and Tree of Life both said they would add a temporary $10 fuel surcharge per delivery. Tree of Life also said its charge would be axed when diesel returns to a “rolling three-month average” of $1.20 a litre or lower.
Daily Hive has independently reached out to these food suppliers to confirm the notices were sent to grocers. We will update the story if they reply.
Loblaw, Sobeys, and Metro respond
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Sobeys confirmed in an email to Daily Hive that it has received a few requests from suppliers about implementing fuel surcharges that it has declined. The company owns grocery stores like Safeway, FreshCo, Foodland, and Farm Boy.
“Similar to our approach to tariffs at this time last year, we believe the fuel market is too unpredictable to make any decisions that could adversely impact the value we provide to our customers,” stated the spokesperson.
In an email response to Daily Hive, Loblaw confirmed that it is in “regular dialogue” with its suppliers and continues to “review cost increase submissions due to changes in underlying market conditions, including any proposed fuel surcharges.”
“We continue to push back on unjustified cost increases, including on fuel surcharges, where not justified to reduce inflationary pressures for Canadians,” stated the Loblaw spokesperson.
Loblaw is the parent company of Shoppers Drug Mart, Real Canadian Superstore, Loblaws, and No Frills.
Metro, which owns grocery stores like Food Basics, Super C, and Jean Coutu, told Daily Hive that it “carefully reviews and negotiates supplier requests to ensure they are justified and to limit the impact on our customers, while continuing to offer competitive prices.”
It remains to be seen if Canadian shoppers will see the effect of these proposed fuel surcharges on their grocery bills.
Food suppliers aren’t the only companies wanting to implement fuel surcharges amid rising gas prices.
Amazon Canada’s fuel surcharge is about to kick in, and Sunwing is the latest travel company to add an extra fee to its bookings as jet fuel prices rise.
On Tuesday, the Canadian government announced that it would temporarily suspend the federal fuel excise tax next Monday, which will cause a slight drop in gas and jet fuel prices.
Check out other services in Canada that are adding fuel surcharges.