Retail trade |  Collusion is not limited to prices

Retail trade | Collusion is not limited to prices

Two competing merchants cannot legally agree to close their business on Monday morning to avoid damaging the other’s business, under penalty of fine or imprisonment. The Quebec Hardware and Building Materials Association (AQMAT) learned this the hard way.

Posted at 6:00 am

Nathaelle Morissette

Nathaelle Morissette
Press

For several months, AQMAT and its president, Richard Darveau, have been campaigning for reduced opening hours to allow shopkeepers and their employees to breathe a little, in a context of severe staff shortages. The idea has been raised that two traders decide together to have similar opening hours.

However, this practice is illegal. The Competition Bureau warned Mr. Darveau that he could be fined up to $25 million or even imprisoned if he encouraged its members to agree on common opening hours.


AQMAT PHOTO FOUR

Richard Darveau, president of the Quebec Hardware and Building Materials Association

“Agreeing amicably between competing companies to agree on the same schedule could have been a tacit option [dans le dossier sur les heures d’ouverture]but the Competition Bureau recently ruled that such collaboration is collusion, as illegal and subject to fines and prison sentences as joint price fixing,” Darveau wrote earlier this week in a letter to the various political parties to challenge them on the importance of the government amends the business hours law.

Turn back. In August 2021, the Competition Office raised its “concern” with the president of AQMAT about the “planned actions” by the organization to start a substantive debate on store opening hours.

“An agreement between competitors to restrict and coordinate their business would raise concerns under section 45 of the Act [sur la concurrence] “, we can read in a letter that the Competition Office sent to Mr. Darveau.

“Whoever commits this crime faces a maximum fine of $25 million and imprisonment of up to 14 years, or one of these penalties,” it also adds. The letter recalls that, in addition to competitors, a party that “encourages or advises others to do so” also risks being held “criminally liable.”

In an email sent to Press, the spokeswoman for the Competition Office, Marie-Christine Vézina, did not want to comment on this specific case as “the Office carries out its work in a confidential manner”. However, she recalled that it is illegal for two companies “to fix prices, allocate sales, territories, customers or markets, reduce or eliminate the offer of a product or service or fix offers.”

In an interview, Mr. Darveau believes this is a “pretty stretchy” interpretation of what collusion is.

The Competition Desk is convinced that encouraging merchants to talk to each other to decide together, for example, to close on Thursdays at 6:00 p.m. so as not to cannibalize each other, is crossing too many limits and we fall into collusion.

Richard Darveau, president of the Quebec Hardware and Building Materials Association

“His argument is that two competing companies cannot come to an agreement to deprive the consumer of a good,” he said, adding that in the process he will respect the current law.

Result: In a context of labor shortages, neighboring hardware stores that might be tempted to follow the same hours and close certain hours to give their employees a break will not proceed for fear of retaliation.

The idea has already crossed the mind of Annie Paquette, general manager of Pasquier food markets, whose grocery stores are located in Delson and Saint-Jean-sur-Richelieu. During COVID-19, she often worked in collaboration with other supermarkets. “We already thought about it, but the problem is that there are corporate stores in every city. »

According to her, they must follow a schedule established by the parent company and cannot modify it at will. Furthermore, Pasquier’s general manager was unaware that such a practice was illegal. “We would never have done anything illegal. »

Division in opening hours

Faced with such a situation, it is up to the government to rule on the issue to allow all merchants to be on an equal footing, believes Ms.me Package. According to her, no individual trader will dare to close earlier on Saturday or even open later on Monday if the competitors do not change their hours.

“We are very much in favor of the idea of ​​the government establishing a law for our employees to breathe,” says Sylvie Senay, co-owner of Avril supermarkets. In the meantime, if the other grocery stores are open, we’re not going to close. »

“It has to be on a level playing field, also believes Louis Côté, vice president of operations for Goulet Sports Group, which owns a dozen Sports Experts stores. At that point, the competition will be forced to move on. Mr. Côté also points out that merchants cannot decide for themselves their opening hours, especially those who have stores in shopping malls, where they must respect the rules imposed by the owners.

AQMAT is also requesting government intervention to change the opening hours, either to close on Sundays or earlier on certain nights. However, the other trade associations do not have the same position.

The Retail Council of Canada (RCC), which represents IGA, Metro, Loblaw, Costco and Walmart, among others, says its members do not want the government to intervene to change a law that will affect everyone equally.

According to Michel Rochette, president of the Quebec CCCD, “traders have a good margin of maneuver to make the decision that corresponds to them.” Mr. Rochette believes that each of them can individually choose a time that suits them.

At the Quebec Retail Council (CQCD), the director general, Jean-Guy Côté, will consult its members on the issue after the elections. He acknowledges that not everyone agrees with this dossier.

While acknowledging the importance of having a competitor’s hours on “one’s radar,” Alexandre Bérubé, a management economist, believes that labor shortages and the opening hours debate should be an opportunity to initiate a more global reflection. “Companies must ask themselves: is it relevant that our consumers are so open? This is where business model innovation comes into play. »


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