Retail trade | Collusion is not limited to prices

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

Nathaelle Morissette
The Press

For several months, AQMAT and its president, Richard Darveau, have been campaigning for a reduction in opening hours in order to allow merchants and their employees to breathe a little, in a context where there is a severe shortage of personnel. The idea of ​​two merchants deciding together to have similar opening hours has been raised.

However, this practice is illegal. The Competition Bureau advised Mr. Darveau that he was liable to a fine of up to $25 million or even a prison sentence if he encouraged his members to agree on working hours. common opening.

“Agreeing amicably between competing businesses 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 jail time as fixing prices together,” Darveau wrote earlier this week. in a letter addressed to the various political parties to challenge them on the importance of the government modifying the law on business opening hours.

Go back. In August 2021, the Competition Bureau raised its “concerns” with the president of AQMAT about “actions planned” by the organization to initiate 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] “, can we read in a letter that the Competition Bureau sent to Mr. Darveau.

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

In an email sent to The Press, the spokesperson for the Competition Bureau, Marie-Christine Vézina, did not want to comment on this specific case since “the Bureau conducts its work in a confidential manner”. However, she recalled that it was illegal for two companies “to fix prices, allocate sales, territories, customers or markets, reduce or eliminate the supply of a product or service or rig offers “.

In an interview, Mr. Darveau believes that this is a “fairly elastic” interpretation of what collusion is.

“Their argument is that two competing businesses cannot agree to deprive the consumer of a good,” he said, adding in the process that he will respect the law in force.

Result: in a context of labor shortage, neighboring hardware stores that might be tempted to follow the same schedule and close for certain hours to give their employees a break will not go ahead for fear of reprisals.

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’ve already thought about it, but the problem is that in every city there are corporate stores. »

According to her, they must follow a schedule established by the parent company and cannot modify it as they see fit. Moreover, the general manager of Pasquier was unaware that such a practice was illegal. “We would never have done anything illegal. »

Division on opening hours

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

“We are very much in favor of the idea that the government put a law in place to let our employees breathe, says Sylvie Senay, co-owner of Avril supermarkets. In the meantime, if the other grocery stores are open, we are not going to close. »

“It has to be on equal terms, also believes Louis Côté, vice-president of operations for the Goulet Sports Group, owner of a dozen Sports Experts stores. At that point, the competition will be forced to follow. Mr. Côté also points out that merchants cannot decide their opening hours themselves, especially those who have stores in shopping centers, where they must respect the rules imposed by landlords.

AQMAT is also asking for government intervention to change opening hours, whether to close on Sundays or earlier on certain evenings. 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 CCCD for Quebec, “merchants have a good leeway to make the decision that belongs to them”. Mr. Rochette believes that each of them can individually choose a schedule that suits them.

At the Quebec Retail Trade Council (CQCD), the director general, Jean-Guy Côté, will consult his members on the question after the elections. He recognizes that not everyone agrees on this issue.

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