Monday, April 22, 2024

Retail | Collusion is not limited to prices

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Maria Gill
Maria Gill
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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 Association for Construction Equipment and Materials (AQMAT) learned this the hard way.

Posted at 6:00 AM

Nathael Morissette

Nathael Morissette

Several months ago, AQMAT and its president, Richard Darvaux, campaigned for reduced working hours in order to allow merchants and their staff to breathe a little, in a context where there is an acute staff shortage. The idea of ​​two merchants deciding together to have similar business hours has been raised.

However, this practice is illegal. The competition bureau has advised Mr. Darvo that he faces a fine of up to $25 million or even imprisonment if he encourages its members to agree on joint opening hours.

Photographing four of the residences

Richard Darvaux, President of the Quebec Association of Hardware and Building Materials

An amicable agreement between competing firms to agree on the same schedule would have been a tacit option. [dans le dossier sur les heures d’ouverture]Darvaux wrote earlier this week in a letter to various political parties challenging them about the importance of the government’s amendment of the Working Hours Act.

flash back. In August 2021, the competition bureau raised its “concerns” with the head of AQMAT about “planned actions” by the organization to begin a substantive discussion about store opening hours.

“Agreement between competitors to restrict and coordinate their actions would raise concerns under Article 45 of the Act.” [sur la concurrence] Can we read a letter the Competition Bureau sent to Mr. Darfo.

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“Anyone who commits this crime faces a maximum fine of $25 million and imprisonment for up to 14 years, or one of these two penalties,” she added. The letter states that in addition to competitors, a party who “encourages or advises others to do so” may also run the risk of being held “criminally liable”.

In an email sent to JournalismCompetition Bureau spokeswoman Marie-Christine Vizina did not wish to comment on this specific case because “the Bureau does its job in a confidential manner.” It noted, however, that it was illegal for two companies to “set prices, allocate sales, territories, customers or markets, or reduce or eliminate product, service, or rig offerings.”

In an interview, Mr. Darvaux believes this is a “fairly flexible” interpretation of what complicity is.

The Competition Bureau is convinced that encouraging dealers to talk to each other to decide together, for example, closing Thursday at 6 p.m. to avoid breaking up with each other, is to cross many lines as we collude.

Richard Darvaux, President of the Quebec Association of Hardware and Building Materials

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

The result: In the context of a labor shortage, nearby hardware stores that might be tempted to follow the same schedule and close certain hours to give their employees a break won’t go ahead for fear of reprisal.

The idea had already crossed the mind of Annie Beckett, general manager of Food Markets in Pasquiere, whose grocery stores are located in Delson and Saint-Jean-sur-Richelieu. During COVID-19, I often worked in conjunction with other supermarkets. We’ve already thought about it, but the problem is that there are corporate stores in every city. »

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According to her, they have to follow a schedule set by the parent company and they cannot modify it as they see fit. Furthermore, Pasquier’s general manager was unaware that this practice was illegal. We wouldn’t have done anything illegal. »

Division by working hours

Faced with such a situation, it is up to the government to decide the issue in order to allow all traders to be on an equal footing, El-Sayed believes.I eviction. According to her, no individual trader will dare to close early on Saturday or even open later on Monday if competitors do not change their schedule.

“We are very supportive of the idea that the government is putting in place a law to allow our employees to breathe,” says Sylvie Sinai, co-owner of Avril Stores. In the meantime, if other grocery stores are open, we won’t close. »

“You have to be on par, believes Louis Cote, vice president of operations for Goulet Sports Group, which owns dozens of Sports Experts stores. At this point, the competition will have to continue. Mr. Cote also points out that merchants cannot set their own hours of operation. , especially those who have stores in malls, where they must respect the rules imposed by the owners.

AQMAT is also calling for government intervention to change business hours, whether to close on Sundays or earlier on certain evenings. However, 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 step in to change a law that affects everyone equally.

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According to Michel Rochet, President of the CCCD in Quebec, “Merchants have good leeway to make their own decisions.” Mr. Rochette believes that each of them can individually choose the schedule that suits them.

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

While acknowledging the importance of having a competing schedule on “one’s radar,” Alexandre Birubi, a management economist, believes labor shortages and the debate over working hours should be an opportunity to start thinking more global. “Companies should ask themselves: Is it appropriate for our customers to be open more often? This is where business model innovation comes into play.”

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