As fuel prices surge amid Middle East tensions, Canadian food suppliers are imposing fuel surcharges to offset their increased costs. Documents obtained by CBC News reveal that Sunrise Farms, CTS Foods, Maple Leaf, and Tree of Life are among the suppliers adding these surcharges. Small grocery store owners are now contemplating passing on these extra costs to customers.
Sunrise Farms announced a five-cent-per-kilogram fuel cost adjustment and a $10 fuel surcharge starting April 13, with the per-kilogram rate to be revised bi-weekly based on fuel market conditions. Maple Leaf introduced an 11-cent-per-kilogram fuel surcharge for all meat and poultry shipments, citing the escalation in oil prices due to the Strait of Hormuz closure.
CTS Foods and Tree of Life also disclosed temporary $10 fuel surcharges per delivery. Tree of Life specified that their surcharge would be lifted once diesel prices stabilize at or below $1.20 per liter over a rolling three-month average.
While some suppliers have refrained from adding surcharges, others like Agropur have decided against implementing them. Munther Zeid, owner of Food Fare in Winnipeg, noted that surcharges could elevate pallet costs by around $100. He mentioned adjusting prices for certain perishable items that necessitate frequent deliveries.
Giancarlo Trimarchi, president of Vince’s Market in Ontario, has received notices of fuel surcharges but has not raised prices yet. He aims to assess the impact of fuel expenses on his business during the upcoming growing season before considering price adjustments.
Larger retailers like Empire, Metro, and Loblaw have received fuel-related surcharge requests from suppliers. While some, like Empire, have declined to pay, others are reviewing and negotiating these requests. Fraser Johnson, an operations management professor, emphasized the significant role of transportation costs in grocery expenses and the need for careful negotiation when fuel prices normalize.
Trimarchi advises consumers to opt for locally sourced products as the Canadian growing season commences, as these items are less affected by fuel-related price fluctuations compared to imported goods.
