As the turmoil in the Middle East continues to drive up fuel prices, several food suppliers in Canada are imposing fuel surcharges on deliveries to offset their increased costs. Documents obtained by CBC News reveal that companies like Sunrise Farms, CTS Foods, Maple Leaf, and Tree of Life are among those implementing these additional charges.
Sunrise Farms, in a letter to buyers, announced a five-cent-per-kilogram fuel cost adjustment and a $10 fuel surcharge starting April 13, with the per-kilogram rate subject to bi-weekly adjustments based on fuel market conditions. Maple Leaf also informed customers of an 11-cent-per-kilogram fuel surcharge for shipments of prepared meat and fresh poultry beginning April 6, attributing it to the surge in oil prices following the closure of the Strait of Hormuz.
CTS Foods and Tree of Life are adding a temporary $10 fuel surcharge per delivery, with the latter specifying that their surcharge would be rescinded once diesel prices stabilize around $1.20 per liter. While some suppliers like Agropur have chosen not to introduce fuel surcharges at this time, others are passing on the cost to grocery store owners, who are now contemplating raising prices for consumers.
Munther Zeid, owner of Food Fare in Winnipeg, stated that surcharges could increase pallet prices by approximately $100. He highlighted the dilemma faced by smaller grocers in deciding whether to adjust prices, noting that some perishable items have already seen price hikes due to the added delivery expenses.
At Vince’s Market in southern Ontario, president Giancarlo Trimarchi acknowledged receiving notices of fuel surcharges from suppliers but has refrained from immediate price increases to avoid burdening customers prematurely. However, as the Ontario growing season unfolds, Trimarchi plans to assess the impact of rising fuel expenses on business costs before considering any price adjustments.
While some larger grocers like Empire, Metro, and Loblaw are contesting the imposition of fuel surcharges, others are negotiating with suppliers to manage cost increases effectively. Fraser Johnson, a professor at Western University’s Ivey Business School, emphasized the significance of transportation costs in the grocery industry and the necessity for diligent negotiation by retailers to mitigate price fluctuations.
Trimarchi suggested that consumers focus on locally grown produce to mitigate the impact of fuel surcharges, as these items typically have lower transportation costs compared to imported goods. He advised that products like French cheese and Australian lamb, which require extensive freight, are likely to be more affected by fuel-related price hikes.
