Quebecor Goes After Loblaw’s Partnership With Bell And Rogers: “Major Cause Of Concern”

Quebecor has lodged a formal complaint with the Competition Bureau of Canada, challenging a new agreement between Loblaw Companies (TSX: L) and telecom giants Bell (TSX: BCE) and Rogers (TSX: RCI.B) through their joint venture, Glentel. This agreement grants exclusive selling rights at The Mobile Shop to Bell and Rogers, potentially excluding Quebecor’s Freedom Mobile from 180 Loblaw-owned grocery stores nationwide.

The company argues this move will significantly strengthen the already dominant telecom oligopoly, which would control 62.5% of all third-party retailers in the Canadian wireless industry if the deal proceeds.

Pierre Karl Péladeau, President and CEO of Quebecor, expressed serious concerns over the anti-competitive nature of the agreement. “The deal between Loblaw and Glentel cloaks yet another attempt by the dominant players in the telecommunications market to thwart competition,” Péladeau said. “There is no other oligopoly where two of the three main players are allowed to work hand in hand to exclude competitors from such an important retail channel.”

Péladeau added that “this new squeeze by Loblaw, a company currently under investigation by the Competition Bureau for anti-competitive tactics in the grocery industry, is a major cause for concern.”

Retail sales represent a crucial revenue stream for the Canadian wireless industry, with Quebecor estimating that over 80% of wireless product sales in 2023 occurred in-store. The Big 3—Bell, Rogers, and Telus—already dominate the market through third-party retailers like tbooth wireless and Wirelesswave. The new deal with Glentel could further entrench their control, raising the controlled retail market share from 49.5% to 62.5%, effectively marginalizing smaller competitors like Freedom Mobile.

This comes after NDP Leader Jagmeet Singh called for a thorough investigation by the Competition Bureau, describing the deal as a potential abuse of market dominance that would limit consumer choice and maintain high prices.

“Loblaws isn’t content just ripping off Canadians when it comes to their groceries. Loblaws is teaming up with Rogers and Bell to rip off Canadians with their cellphone prices,” Singh stated, emphasizing the need for regulatory oversight to protect consumer interests.

The Competition Bureau recently launched investigations into the parent companies of Loblaw and Sobeys, citing alleged anti-competitive practices. These investigations, which began on March 1, 2024, focus on the companies’ use of restrictive covenants and exclusivity clauses in their property leases, which are believed to limit competition in the grocery market.

Information for this story was found via the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply