Manufacturers keeping Canadian prices high: say retailers

Last Updated: Monday, October 22, 2007 | 2:02 PM ET

CBC News

Retailers scheduled to meet with Federal Finance Minister Jim Flaherty on Tuesday say the minister's consumer "crusade" to bring Canadian and American prices in line is misdirected.

Diane Brisebois, president of the Retail Council of Canada, which represents 40,000 stores, said Monday her group called for the meeting to explain how prices are set.

"Although we appreciate that the minister wants to get involved, his so-called crusade is misdirected," Brisebois said, noting Flaherty should put pressure on the manufacturers to lower prices in Canada.

The Consumers Council of Canada is urging consumers to continue to keep pressuring retailers to lower their prices.
(CBC)

Brisebois said manufacturers are continuing to mark up prices in Canada by 20 to 50 per cent, and therefore retailers have little savings to pass on to the customer.

"The minister needs to put pressure on that community as he has done to retail," she said.

"He's not talked about the publishing industry; he's talked about booksellers. Well booksellers don't set the price. The publishing industry, the magazine industry, the car manufacturing industry — those are not retailers. Retailers are given a certain price, they have a markup and they sell the merchandise."

The loonie hit $1.0207 US in trading Monday morning. But recent price comparisons have shown identical items are often priced more than 20 per cent higher in Canada than in the U.S.

Shipping costs, inventory stock factor into pricing

Retailers have defended their prices, saying the price difference is linked to high shipping costs and inventory acquired before the dollar hit parity. Last week, two of Canada's biggest retailers — Wal-Mart and Zellers — announced they were dropping prices on some goods to reflect the loonie's rise.

'Consumers keep those voices heard.'—Eleanor Friedland, Consumers Council of Canada

Eleanor Friedland, vice-president of the Consumers Council of Canada, said Tuesday consumers should continue to push for lower prices, and she urged retailers to respond.

"Sometimes for good public relations the retailer is doing it, they may call it a sale, or a special day or what have you, but they are doing it," she said. "Consumers keep those voices heard."

Friedland also noted that prices will only fall if manufacturers act first.

"I'd like to see Mr. Flaherty take a very strong hand, but I understand the retailers' argument," she said Monday.

"I want to see Mr. Flaherty speaking to the manufacturers and pushing them. Once he does that, you'll see it come pushing through, and I think it will be across the board."