How the son of a grocer from Lac Saint-Jean landed in the centre of Canada’s big food fight

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André Lamontagne bought a suburban supermarket on the West Island of Montreal in 1986. He was 26 and new to the business, so some evenings, after the store was closed, his dad would show up.

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Jean-Louis Lamontagne had co-founded the Provigo grocery chain years earlier. By the 1980s, he was retired and André — the only one of his five kids to go into the food industry — was running a Provigo store of his own.

The two paced the empty store together, through the bakery, into the fridges and freezers, while Jean-Louis offered advice and asked questions about a product display or whether the meat manager was getting enough profit out of a side of beef.

“He would challenge me,” the younger Lamontage recalled.

Lamontagne has been thinking about those conversations with his dad, 30 years and several careers later, now that he finds himself in the middle of what could be one of the most transformational moments in Canadian grocery business history. The 61-year-old is three years into his term as Quebec’s Minister of Agriculture, and has in the past year become one of the leading politicians behind a high-profile probe of the national food chain.

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For more than a decade, farmers, independent grocers, food processors and multinational consumer product manufacturers have complained their businesses are being put in jeopardy by unfair penalties and fees charged by supermarket chains. Suppliers say they have no choice but to pay the fines, since they can’t afford to be shut out of any of the big chains, which together make up about 80 per cent of sales.

But top trade groups and leaders in the industry are now in mediation to develop new rules that would rein in the power of the big grocers and overhaul how food is brought to market.

There is a long list of reasons and people behind why that’s happening, but many suggest that one major force is Lamontagne, the son of a grocer from Lac Saint-Jean.

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Captain Quebec

In 2013, André Lamontagne was a licensed helicopter pilot who owned a helicopter refurbishing business. That fall, he read future Quebec Premier Francois Legault’s book, Focus on a Winning Quebec. He read it again while away on a holiday that Christmas, and called a good friend who knew Legault personally.

“When I come back, I really need to get in touch with this guy,” he told the friend. “I want to help him.”

Lamontagne figured he could help as a sort of adviser, maybe as a “a writer, as a thinker, as a whatever.” He had owned three supermarkets, then sold them all in the late 1990s, co-owned a chain of travel agencies, opened a community newspaper, worked as an executive coach and an angel investor, and ran a management consulting firm.

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The friend put in a word for Lamontagne and Legault called him about a month later under the impression he wanted to be a candidate.

“No,” Lamontagne said. “I don’t want to be a candidate.”

The two met in person and Lamontagne talked about the ways he thought he could help the upstart Coalition Avenir Quebec. Legault heard him out, then said, “If you really want to help me, I want you to be a candidate,” Lamontagne recalled.

He promised to give Legault a response by the next day, then went home to his wife and two daughters. His wife, Kristine, had come through cancer treatment the year before. He walked in the door, and there must have been something about his smile, or the light in his face.

“She looked at me, and said, ‘Well, he asked you to be a candidate,’” Lamontagne recalled. 

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Lamontagne was so passionate about his province that Kristine liked to call him Captain Quebec around the house with the girls.

“Go and do it,” she told him.

He called Legault that night. “OK, I’m with you. I’ll do it,” he said.

Lamontagne was elected in the riding of Johnson, halfway between Montreal and Quebec City, in 2014. Kristine’s cancer came back later that year. She died in February 2017.

Another provincial election was coming the following year, and he wasn’t sure if he’d run again. “I just had lost my wife and I was 58,” he said.

But it was the sort of work that had “the opportunity to make a difference for lots of people” in the province, he said. “When I get up every morning, for me, it’s very important I’m at peace every day with who I am and what I do.

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He went to Legault’s office, and told him: “That’s it. I’ll go again.”

Lamontagne was re-elected in 2018, when Legault and the CAQ ascended to power, and was appointed minister of agriculture.

Fix this, or the government will fix it for you

This summer, one of the most anticipated events in the Canadian food world came at a July meeting of the FPT — industry jargon for a semi-annual congress of agriculture ministers from the federal, provincial and territorial levels.

This particular FPT meeting unveiled a much-talked-about report on the fees and fines charged to food producers that had driven years of infighting within the grocery industry. The two leaders of that investigation, Lamontagne and federal Agriculture Minister Marie-Claude Bibeau, were expected to present a way forward.

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In what has become common practice in Canada, large food retailers bill their suppliers for a range of perks or infractions, including product promotions and penalizing late or incomplete shipments, because even the most minor hiccup at a grocery chain’s distribution centre can cause serious knock-on effects.

Suppliers argued that the few dominant grocers were treating the fees and fines as a revenue source rather than a deterrent. Yet they had to pay up since they couldn’t afford to risk being cut off or “delisted” as retribution.

This year, legislators took notice and Lamontagne emerged from a closed-door FPT meeting in July with a public warning to the industry: Fix this, or the government will fix it for you.

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“By the end of the year, we want to have the solution ready to be implemented,” he told the Financial Post at the time.

The industry had less than six months to get its act together. Some trade groups had already argued that the best solution would be a code of conduct, similar in style to one used in the United Kingdom, which has rules and an enforcement body that successfully reined in the bully tactics once rampant in that country’s supermarket business. But retailers had resisted such suggestions, at least until this year.

Since the FPT report, representatives from some of the top food business groups have started working with a professional mediator to develop a code and meet the year-end deadline.

That, in itself, is “a victory,” said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University in Halifax.

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“Two years ago, if you would have asked me if we are going to see some kind of code of conduct in Canada, I would have said to you, you’re crazy. But here we are.”

‘Diabolical’ fees

Online grocery shopping was one reason things came to a head during the pandemic. Canadians had been comparatively cool to the idea, but the risk of catching COVID-19 quickly changed their minds. Grocers had to drastically ramp up their e-commerce operations to keep pace with a surge in demand for curbside pickup and home delivery.

Those upgrades weren’t cheap. Walmart Inc., the fourth-largest grocery operation in Canada, in the summer of 2020 announced it was spending $3.5 billion on a five-year modernization plan, in part to stay on top of online grocery orders that had doubled or even tripled in some regions.

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Within days of the announcement, Walmart outraged suppliers by introducing new fees to help cover the cost. The trade association Food Health and Consumer Products of Canada called it “ diabolical .”

Walmart argued the new fees — up to 6.25 per cent of the cost of goods — were “fair and reasonable,” since the upgrades would ultimately benefit suppliers by generating higher sales.

Lamontagne, like others in the industry, thought differently.

“I thought, ‘Wow, that’s pretty steep,’” he said. “For me, it was very easy to understand what was happening.”

Within a few months, Loblaw started charging a similar style of fee, asking its suppliers to help cover a $6-billion upgrade of its stores and e-commerce operations.

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But Empire Co. Ltd., Canada’s second-largest grocery chain and owner of Sobeys and Safeway among others, broke with its competitors. That fall, chief executive Michael Medline publicly criticized the new fees as “repugnant” and said relationships in the business were the worst he’d seen in his decades in retail.

One of the most groundbreaking aspects of Medline’s position was his newfound embrace of a code of conduct.

“This is a tough one. But, you know what? Yeah,” he said. “We’re open to it now.”

Medline’s statement was a bombshell within the industry: An executive from Big Grocery joining suppliers and small businesses to call for more rules.

Implementing such a thing, however, was a bit harder, even as political pressure mounted. Conservative agriculture critic Lianne Rood repeatedly asked about the subject in question period, but the government determined a code was out of federal jurisdiction, since regulating terms of sale is a provincial issue.

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The thought of 10 different regulations stretched across a national food supply chain wasn’t appealing, so agriculture minister Bibeau suggested the federal government could help coordinate a more coherent response across the country.

To do that, the feds needed a provincial ally to help champion the issue through the FPT, according to one aide in Bibeau’s office, who spoke on condition of anonymity. That ally was Lamontagne in Quebec, who was pushing the issue with his counterparts in other regions.

“Without him, we would not be where we are today, for sure,” said Marcel Groleau, president of the Quebec farmers’ group L’Union des producteurs agricoles.

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Public servants started conducting the first of what ended up being more than 60 meetings with industry executives and representatives. At first, Lamontagne said, some were reluctant to participate.

The Retail Council of Canada, which represents the big grocers, had long resisted new rules, but it surprisingly joined a coalition of lobby groups to present FPT investigators with a blueprint for implementing a code of conduct.

“When everybody realized that we meant business and that we were really at work, well, everybody got on board,” Lamontagne said. “The word spread out that the train was on the rails and it was leaving the station … and if you want to be heard, you better be a part of the process.”

Minister ‘le sous-marin’

Lamontagne’s early days as Quebec’s agriculture minister were marked by a major scandal over the firing of a ministry expert who leaked documents about the harmful effects associated with a particular pesticide.

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He acclimatized to the role in the glare of that scandal, and has since operated in a style one staffer calls “le sous-marin ,” a submarine in that he has the propensity to dive deep on issues without attracting too much attention.

Still, Lamontagne has since won supporters inside the agriculture sector, and set himself apart as a rare minister interested in how food is processed and sold, rather than just how it’s grown.

“Food processing, as you probably know, is never a top priority for any minister of ag,” said Sylvie Cloutier, who leads the Quebec Food Processing Council.

Sophie Perreault, executive director of the Quebec Produce Marketing Association, called Lamontagne the best ag minister she’s seen in her 18 years in the business. Maybe that’s not surprising, considering the minister’s big funding plan to boost Quebec’s domestic food production.

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Medline at Empire, who many have credited as one of the key catalysts in the latest push for a code of conduct, said in a statement that Lamontagne has been “instrumental” in the process.

The process isn’t over, but Lamontagne is confident a code will be locked up by December.

“I don’t see other options,” he said.

‘Throw someone in hot water’

Lamontagne isn’t one to be deterred from a mission. As a teenager living in Quebec City, Lamontagne wanted to improve his English. His siblings had gone to work elsewhere to perfect their second language, including an older brother who worked at a tobacco farm in Ontario.

Through the Provigo business, his dad knew a fruit and vegetable broker in central California, so Lamontagne spent two summers learning about lettuce and cantaloupe. Sometimes he would sit with the broker after work and ask questions about how the business worked.

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“Throw someone in hot water and you become the same temperature as the water,” he said of his tutelage.

Lamontagne received the same sort of learning from his dad. In his teens, he knew he wanted to study business and eventually start a business.

“I would sit a lot with my dad,” he said. “We were five at home, but I was very close to him.”

For much of his life, his dad was his only parent. His mother died of cancer, at 42, when Lamontagne was six. For the 15 years that Lamontagne owned his Provigo stores, his dad remained a close confidante.

His father died in 2002, shortly after Lamontagne sold the last of his three supermarkets, well before launching into a long and varied career that currently puts him at the edge of a potential milestone in grocery. It gnaws at him a little when he thinks about what his dad has missed.

“Sometimes, you know, I’m sad about that,” he said. “I wish he would have known more of what I’ve become.”

• Email: [email protected] | Twitter: jakeedmiston