The new voluntary grocery code of conduct for retailers, suppliers, wholesalers, and primary producers in Canada is scheduled for full implementation on Thursday.
This code aims to enhance fair business practices among retailers and suppliers, particularly concerning penalties and fees. Its establishment seeks to bring increased transparency, equity, and predictability to the entire industry.
Administered by the Office of the Grocery Sector Code of Conduct, this code encompasses trade rule provisions, a governance structure, and a process for adjudication and dispute resolution.
The five largest grocery retailers in Canada — Empire, Loblaw, Metro, Walmart Canada, and Costco Canada — have officially enrolled in the code.
As of January 1, the code, introduced in phases, will be fully operational, including the mechanism for resolving disputes and the repercussions for breaches of the code.
Stakeholders, including retailers, suppliers, and other industry participants, will be able to lodge formal complaints. The Canada Grocery Code office will also commence collecting annual membership fees and publishing yearly reports that outline industry trends, systemic hurdles, and suggested enhancements.
However, industry experts interviewed by CBC News expressed differing views on whether the code, designed to foster better relationships within the sector rather than reduce food prices, will significantly impact consumers.
Public Concerns with Grocery Practices
The formation of the industry committee tasked with developing the code was triggered by disputes over fees imposed on suppliers by major grocery chains, a contentious issue that peaked in 2020.
Persistent high food inflation following the COVID-19 outbreak fueled public discontent with the grocery sector. While the code was not crafted to lower prices, its adoption evolved into a political matter.
Some retailers hesitated to endorse the code initially. For instance, Loblaw raised objections to an early version of the code, arguing it could lead to price hikes for consumers. The federal government warned that the code might become mandatory if all key players did not comply.
The code delineates specific regulations and guidelines for retailers and suppliers, including detailed provisions on fees and conditions under which retailers can levy them. It also outlines a protocol for resolving disputes in cases where parties cannot reach a mutual agreement.
Although this code is a pioneering initiative in Canada, other nations like the U.K. and Australia have their own grocery codes in place.
Loblaw Companies Ltd. indicates its willingness to adhere to a long-planned code of conduct for grocery retailers, contingent on other industry players doing the same. The code aims to level the playing field for suppliers and smaller retailers.
Impact on Prices? Perspectives Differ
Former Empire CEO Michael Medline was the first prominent grocery executive to advocate for a grocery code of conduct to create a fairer environment for Canadian retailers and suppliers.</p
