Canadian grocery store code of conduct reaches final milestone: ‘A positive step’ – National
All major Canadian grocers are now on board for a Grocery Store Code of Conductpaving the way for sectoral guidelines that took several years to develop.
Federal, provincial and territorial agriculture ministers made the announcement Thursday at their annual meeting in Whitehorse, saying the last holdouts, Walmart and Costco, have now agreed to sign the code.
“This is a positive step towards greater fairness, transparency and predictability in Canada’s food supply chain and for consumers,” the ministers said in a statement.
Confirming support from the five major retailers — Loblaw, Walmart, Costco, Metro and Empire, which owns Sobeys — is a “significant milestone,” said Michael Graydon, CEO of the Food, Health & Consumer Products of Canada and chair of the code’s interim board.
“It was essential that all retailers were involved because it is a very competitive sector,” he said.
“It was an all-or-nothing situation. And I think they all respected that and came to the negotiating table.”
The voluntary grocery code aims to level the playing field for suppliers and small retailers by providing guidelines for fair negotiations.
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Last fall, progress on the code appeared to be in jeopardy as it neared completion, with some major retailers saying they weren’t ready to sign on. Executives from Loblaw and Walmart Canada told MPs at a House of Commons committee meeting they were concerned the code would lead to higher retail prices.
As a result, calls to make the code mandatory have grown, with the House of Commons committee studying food prices telling Loblaw and Walmart in February that if they don’t sign on, it would recommend the code be passed into law — an option the federal agriculture minister has said he is considering.
In May, Loblaw said it would accept the code if others in the industry did the same, saying its concerns had been allayed by changes to the document.
“The current code is fair and will not lead to price increases,” Chairman and CEO Per Bank said at the time.
After Loblaw’s announcement, attention turned to Walmart Canada and Costco, but both retailers have now agreed to support the code.
Canada’s five largest grocers have come under intense public and political pressure as grocery prices have risen more than 22 per cent in four years, with accusations of profiteering and some consumers launching a boycott of Loblaw earlier this year.
Grocers have defended themselves against the accusations, telling MPs that their businesses are not responsible for rising food prices.
“The truth is we are at the end of a very long food supply chain that has economic inputs at every step and every stage,” Empire Chairman and CEO Michael Medline told the committee in March 2023.
More recently, Bank and Loblaw Chairman Galen Weston pushed back against what he called “misguided criticism” of the grocer as calls for a boycott gained momentum online.
Grocery companies have also expanded their presence in discount stores to meet growing consumer demand for lower prices, and these stores have been the main drivers of sales growth.
As grocers face pressure to stabilize prices and accept the grocery code, the Competition Bureau has also launched investigations into the parent companies of Loblaws and Sobeys for alleged anti-competitive conduct.
The Bureau is looking at the use of property control measures in the sector, clauses in commercial leases intended to restrict other potential tenants and their activities. It argues that such clauses limit competition not only for small Canadian grocers, but also for potential foreign entrants into the sector.
Industry Minister François-Philippe Champagne said he is looking for a foreign grocer to come to Canada and help boost competition.
© 2024 The Canadian Press
