Buyers that supply supermarkets and local chefs pick up their produce at the Ontario Food Terminal in Toronto, Ont. on Nov. 18, 2010.Kevin Van Paassen/The Globe and Mail
Sarah Elton is an assistant professor and director of the Food Health Ecosystems Lab at Toronto Metropolitan University.
Last week, the Canadian Competition Bureau called on governments to take action to foster more competition in the grocery industry. In a report, they concluded that a wider diversity of businesses selling Canadians their groceries could help lower food prices.
Research conducted at my lab since 2020 has found that the Ontario Food Terminal in Toronto services a wide range of businesses beyond the big five supermarkets, and supports easy access to fruits and vegetables in neighbourhoods across the city and beyond. This piece of public food-system infrastructure offers a model for the kind of diverse retail foodscape that the country needs more of.
Six days a week, fresh fruits and vegetables arrive at the terminal from farms in Ontario and Quebec, and from as far away as Chile and South Africa. In the early hours of the morning, buyers arrive and the wholesale marketplace buzzes with activity, with workers quickly moving skids of lettuce, strawberries, carrots and other produce along the supply chains connecting farms to consumers.
The terminal is the wholesale marketplace for fresh fruits and vegetables sold all over the Greater Toronto Area and beyond, from small shops on main city streets, to flea-market and roadside produce sellers, to neighbourhood grocers and independent supermarkets that are not owned by the big five grocery brands (the big-box retailers have their own supply chains and don’t rely on this public institution.) Food sold at the terminal also supplies other independent food businesses, such as restaurants and caterers. Independent buyers from across Ontario, Quebec and even the Atlantic provinces also come to purchase produce there. While conducting our research on supply chains at the terminal, people often tell our team that this institution makes a diverse retail foodscape truly possible. Our research has found this to be true.
According to historian Helen Tangires, public markets (including wholesale markets like the terminal) were founded in North America out of a belief that governments had an important role to play in organizing food markets. Wholesale markets were opened to shorten the connection between farmers and buyers, reducing the waste of food, time, and money, she writes. The Ontario Food Terminal itself was founded in 1954 by the provincial government and still offers not only a central marketplace but also warehouse and cold storage services to many food businesses. For almost 70 years, the institution has been run by the Ontario Food Terminal Board at arm’s length from the province. It is the third largest of its kind in North America, and the largest one in Canada.
I’ve heard some people muse that this kind of public infrastructure belongs to a different time and that the corporate supply chains of the big box stores are the future. This is because the supermarket industry has gone through decades of corporate mergers and consolidation, resulting in a very powerful sector in which people who do business with these large corporations, from farmers to consumers, have less and less choice. The Competition Bureau’s report describes how many independent grocers, without warehouses and direct sourcing from suppliers, are even forced to buy product from the wholesale subsidiaries of the big chains.
In contrast, the wholesale terminal supports a diversity of food businesses that provide consumers with choices for their groceries, specifically because the institution serves small and independent businesses. These businesses pay $275 for two years of access to the wholesale market. Rather than relying on one supply chain or one seller, at the terminal they can choose to buy from dozens of different ones (hundreds if you count all the Ontario farms with product for sale there throughout the year.) The buyers and sellers develop relationships that we found to have helped them weather the serious challenges posed by COVID-19. Farmers in Ontario have told me that their best customers are at the terminal, while small grocers and independently-owned supermarket managers have reported that its marketplace is key to the success of their businesses.
Big-chain corporate supermarkets dominate 76 per cent of food retail in Canada, according to the USDA Foreign Agricultural Service. Corporate consolidation in the supermarket industry exists in the United States as well. But there is a renewed interest in the role of public markets not only in Canada but around the world. Last month in Toronto, policymakers, market managers and researchers came from many countries to the International Public Markets Conference to discuss how public markets, including wholesale, help cities to thrive. In Nova Scotia, efforts are afoot to open a wholesale terminal as part of the Halifax Hub Project.
Governments looking to implement the recommendations of the Competition Bureau and stimulate competition in the retail industry should look to the public produce wholesale market for a time-tested solution to foster choice for grocery shoppers.