Amid rising fuel costs linked to Middle East tensions, Canadian food suppliers, including Sunrise Farms, CTS Foods, Maple Leaf, and Tree of Life, are imposing fuel surcharges to offset their increased expenses. These surcharges, revealed through documents obtained by CBC News, have prompted grocery store owners, particularly smaller businesses, to contemplate passing on some of the added costs to consumers.
Sunrise Farms disclosed plans to introduce a temporary five-cent-per-kilogram fuel cost adjustment and a $10 fuel surcharge starting April 13, with adjustments every two weeks based on fuel market conditions. Similarly, Maple Leaf announced an 11-cent-per-kilogram fuel surcharge for shipments of prepared meat and fresh poultry, citing the surge in oil prices following the Strait of Hormuz closure.
CTS Foods and Tree of Life also confirmed temporary $10 fuel surcharges per delivery, with the latter pledging to remove the charge once diesel prices stabilize at $1.20 per liter or lower. Responding to inquiries, a CTS Foods spokesperson clarified that the surcharge aimed to mitigate exceptional delivery expenses and was not intended as a permanent measure.
While some suppliers have refrained from applying fuel surcharges, others like Agropur have decided against implementing such fees at present. Munther Zeid, owner of Food Fare in Winnipeg, highlighted how surcharges could potentially increase pallet prices by around $100. He mentioned adjusting prices based on the impact of fuel surcharges on individual orders, particularly for perishable items requiring frequent deliveries.
Giancarlo Trimarchi, president of Vince’s Market in Ontario, acknowledged receiving notices of fuel surcharges from undisclosed suppliers but has so far avoided raising prices in his stores to maintain customer sensitivity. Larger grocers like Empire, Metro, and Loblaw have either rejected or are reviewing supplier requests for fuel-related surcharges, emphasizing ongoing negotiations to address market conditions.
Experts like Fraser Johnson from Western University’s Ivey Business School underscore the significance of transportation costs in grocery pricing, with fuel surcharges potentially constituting a notable portion of expenses. Johnson highlighted the negotiation power of major grocers in addressing cost fluctuations and expressed skepticism regarding the immediate impact of the federal government’s fuel tax holiday on alleviating market pressures.
Trimarchi advised consumers to seek locally grown produce as a cost-saving strategy, emphasizing the reduced fuel-related costs associated with domestic products compared to imported goods. He cited the potential freight implications on imported items like French cheese and Australian lamb due to extended shipping distances.