Nutrition North starts up with low-price pledge

“The cost of a healthy basket of food at most Northmart stores… will drop a minimum of five per cent today,” says Michael McMullen, executive vice president of the North West Company. (FILE PHOTO)

April 1 brought the long-awaited kick-off of the Nutrition North Canada food subsidy program and Nunavut’s largest grocery retailer marked the occasion by hyping what it calls a major drop in the price of fresh food.

“The cost of a healthy basket of food at most Northmart stores… will drop a minimum of five per cent today,” said Michael McMullen, executive vice president of the North West Company, standing in front of a neatly arranged pile of apples and oranges.

Nutrition North replaces the old Canada Post-run food mail program.

The new scheme offers subsidies on a more restricted list of healthy foods, eliminates mandatory entry points for subsidized food, and allows retailers to negotiate their own freight rates with airlines.

Last month, the federal government announced it will apply the new subsidy rates to a wider list of products, to allow retailers more time to build warehousing space.

But the list of eligible products will shrink to a limited list, mostly fresh meat and produce, in October, 2012.

Kenn Harper, who owns Arctic Ventures in Iqaluit, said the elimination of mandatory access points allowed his business to find new suppliers and should make for fresher produce in stores.

“We’re not buying in Val d’Or [Quebec] anymore,” he said. “Why would we?”

McMullen agreed. “A banana only has five days of life, so if we lose a day and a half because we have to go through an artificial entry point, or Canada Post has to inspect it, that shortens the shelf life for the customers in Iqaluit.”

McMullen said North West Co. has already negotiated new rates with airlines and some southern wholesalers.

But he also acknowledged that cost pressures, both for energy and food, will rise over the long term.

“Oil will go up, oil will go down,” he told reporters. “If we see slight price increases in the next couple of months because of that, we know that all those savings we get from our freight companies, we’re going to pass them on.”

But retailers still face skepticism from northern customers that they’ll actually save money.

Ron Elliott, the MLA for Quttiktuq, people in his community of Arctic Bay still think food prices are too high, no matter what happens with Nutrition North.

“I think we’re back to where we were on May 7, 2010 when the program was first announced,” he said. “So it’s not totally good news, but it’s a start.”

Some commenters on Nunatsiaq News’ Facebook page also suggested North West Co. jacked up prices in advance of Nutrition North.

“Absolutely not,” he said. “We have tracked that so we can measure [prices] and let people know what’s going on.”

And the ability for retailers to negotiate their own freight rates has left some worried that smaller, independent retailers won’t be able to compete with Northern stores, because they won’t be able to win rates as favourable as the North West Co.

“We’re not going to apologize for our size,” McMullen said. “We’re going to leverage our size to be as strong as possible for the customers in the North.”