For The First Time, The Régie Grants Retailers An Exclusive Price Increase

At just 2 cents per liter on average or about 1.2%, the new Quebec milk retail price increases unveiled for 2018 are nothing to celebrate after a year of freezing prices in 2017.

On the other hand, retailers obtain, for the first time, a third cent of increase per liter through a larger gap between minimum and maximum prices, which is an exclusive price zone for retailers.

It is thus a historic first for retailers!

For example, out of the 3 cents per liter granted on December 27 by the Régie des marchés agricoles et alimentaires (RMAAQ), retailers alone obtained one-third of the increase granted, which is exactly what they asked for in principle, an exclusive increase, which can not be repatriated, recovered or – dare the word – stolen by large dairy companies, as they have always done, leaving retailers with crumbs and a pat on the back.

For the first time, the Régie des marchés agricoles et alimentaires not only raised the minimum and maximum prices as usual, but also agreed to increase the difference between minimum and maximum prices from $ 0.15 to $ 0.16 $ per liter, an increase of 1 cent per liter, or 0.7 per cent. This historic precedent, the result of constant pressure from the ADA under the leadership of Florent Gravel, represents the first increase granted exclusively to retailers as dairies no longer have the right, since 2010, to sell retailers their milk at a higher price than the set minimum price.
A great personal victory for Florent Gravel

In an exclusive interview with DepQuébec, the main author of this success said he was very happy with the turn of events, seeing years of effort and pressure rewarded in the face of the sustained adversity from the impressive dairy lobby.

Florent Gravel, CEO of the Association des détaillants en alimentation (ADA), highlighted the historic precedent of the latest decision from the Régie unveiled between Christmas and New Year’s Day.

“This is a landmark decision in support of small retailers. All those who do not have big enough volumes to negotiate milk prices below minimum prices are now guaranteed to fetch at least 1 more cent per liter. This is not very much of course, but it is the first time that such an increase is granted to them exclusively, without the dairy companies being in a position to capture that increase as usual. ” – Florent Gravel

The ADA leader who will be retiring next spring also expressed disappointment at the lack of support and consensus from other voices in the retail industry, namely one other organization that effectively sided with the dairy lobby and refused to support ADA’s demand to increase the gap between minimum and maximum prices. Indeed, in section 26 of the Régie’s decision, we find the following statement:

WHEREAS the CILQ, Agropur and the RCC are of the opinion that there is no reason to follow the request of the ADAQ (to increase the difference between the minimum price and the maximum price or to oblige processors to sell milk to retailers at less than the minimum price) in the absence of a demonstration of the problem based on a rigorous and statistically representative survey. – Article 26 of the RMAAQ decision on the price of milk, December 27, 2017

The fact that the Régie has agreed to the ADA’s request in defiance of a reverse recommendation by the RCC (Retail Council of Canada) looks like a slap in the face to the latter administered by none other than the relevant tribunal authority in the matter. This case will certainly bring food for thoughts for the RCC, whose new Quebec leader, Marc Fortin, will take office shortly. This new leadership will be a great opportunity for the group to rethink their overall retailer advocacy approaches and strategies and learn from the ADA’s successes and tangible gains for the industry as a whole.

The most recent RMAAQ decision on milk prices is the best retirement gift Florent Gravel could think of. Years of effort and hard work in a climate of adversity have led him to obtain two major gains for retailers in the milk category: 1) dairies no longer have the right to sell their milk at a higher price than the set minimum price since 2010; and 2) retailers have just seen their first increase of the gap between the minimum and maximum price, a margin room they exclusively occupy, hoping that this indexing will now be applied each year.

The new milk prices will be effective from February 1, 2018.

DepQuébec

Cet article est rédigé par DepQuébec, le premier portail web au Québec de l'industrie des dépanneurs. / This article is written by DepQuebec, the first web portal devoted to the Quebec depanneur industry.

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