Rumblings in Canada’s grocery elite: Sobeys franchisees go independent

CFIGPeterKnipfelCFIGlogoWikidFranchise.org often adds depth and perspective to a current media franchise industry article.

Let’s take a look at the decades-old, but next to invisible, war of wills within Ontario’s grocery industry.

Last week, the Canadian Broadcasting Corporation reported that Buy-local push prompts Ontario grocers to go independent.

The Toronto Star ran a story last Saturday called Meat cleaves grocer’s tie to Sobeys: Ex-franchisee goes independent to gain right to sell beef, pork, poultry produced locally about 5 Sobeys franchisees taking themselves independent in southwestern Ontario.

That doesn’t seem to be much of a story unless you start looking into the background of the franchisees involved. The current press spin (a desire for more local suppliers) is certainly not the whole story.

In the CBC story a Mr. Peter Knipfel is quoted as saying:

“We actually put it [franchisor non-authorized products] on our shelves because we felt it very necessary for it to be in our community, and that prompted that we get away from the franchise system, because it was not making them [Sobeys] happy,” Knipfel says. “I didn’t want to ruffle any more feathers, so we just decided to part company.”

Grocery franchisors in Canada ruthlessly control what products can and cannot be purchased in their franchisees’ stores. Vendor programs (rebates, kickbacks, allowances) are a very important source of income for Big Grocery in Canada.

WikidFranchiseWhen you search WikidFranchise.org for “Peter Knipfel” you get the following article: CFIG Public Hearing Testimony. It appears that Knipfel was the Chairman of the Board of the Canadian Federation of Independent Grocers in 2000.

He is quoted as their Chairman in 2000 as saying:

…With the consolidation today in the grocery industry and the control that the franchisor has over the franchisee as far as pricing and our profitability is concerned, we need some protection for some fair dealing with our franchisor…

Sure enough, when you hop over to the CFIG’s website Knipfel’s photograph (see above) is prominently displayed as the Feature Story scroll.

That a former Chairman of the CFIG is one of the defecting franchisees is an indication that this story has much more to it than the simple formation a group called the Independent Hometown Grocers Co-Op.

I created WikidFranchise to help non-insiders understand the hidden meanings within franchising.

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3 Responses to Rumblings in Canada’s grocery elite: Sobeys franchisees go independent

  1. Karen Mahon says:

    Do you have a warehouse for distribution? There many good products that will never see a retail shelf in the Sobeys, Loblaws, etc. stores. We have a fantastic product that is very available in the US and we produce it here in Ontario, Canada with Ontario grown soybeans. It is a food staple, a needed product – basically what mom’s want for their children and especially in schools where there are peanut and tree nut free policies. It is a simple whole food that kids love – Soybutter – a peanut butter replacement – not just another protein spread – a true peanut butter replacement. Our soybutter tastes like, looks like and smells like peanut butter. Unless told you would think you were eating peanut butter.

    Wow! Tastes just like peanut butter soybutter is sold under our school safe logo and helps mom, kids and caregivers prepare school lunches without the fear of sending peanut and tree nut allergens that might cause an anaphylactic reaction to those allergens.

    Visit soybutter.com and help me get this product to your customers. Trust me it is something they want to know about.

    Sincerely,
    Karen

  2. Les Stewart says:

    Karen,

    There are many excellent products that never reach Ontario/CDN store shelves because of the near-monopolistic nature of the three vertically-integrated grocery giants. It takes a tremendous amount of $ for shelf space.

    Les Stewart

  3. Interesting read.

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