Canada’s first Grocery Code of Conduct, which aims to improve the relationship between the grocery chains and their suppliers, is in doubt as two major retailers refuse to participate.
The voluntary code is intended to address some of the most contentious issues in the industry including arbitrary fees that are imposed by the large grocers, increases in fees to suppliers without notice or negotiation and late payments to suppliers. The code is said to be game-changing, bringing more balance to the retailer-supplier relationship to address fees that large grocery retailers charge suppliers.
Canada’s grocery industry is dominated by several powerful retailers. Galen Weston, executive director of Loblaw Companies, and Gonzalo Gebara, president and CEO of Walmart Canada, recently told Canadian government officials that the code of conduct will lead to higher prices for consumers because it will give multinational manufacturers too much power.
Michael Medline, chief executive of Sobeys’ parent company Empire, is urging the government to implement a grocery code of conduct. He states “In no way do we believe, nor does evidence show, that a grocery code of conduct would lead to higher food prices or less choice for Canadians. In fact, quite the opposite.” He believes that an effective code will help to stabilize food prices for Canadians.
While Medline didn’t specifically name Loblaw or Walmart Canada he says that “there are one or two large grocers who do not support the code in its current form, or maybe any code, and that’s slowing things down.” He has asked the agriculture committee to push the code through and said that “it would be a sad day for Canadians and for the industry” if retailers do not sign onto the code. Medline added “This code is not a huge ask. It asks this industry to act with respect, it asks some very basic rules that apply and people just do in other retail other than grocery and it would be a missed opportunity of epic proportions” President and CEO Eric La Fleche of Metro agrees saying all industry players need to sign on to the grocery code of conduct in order for it to be successful and Metro is willing to sign the code as it’s currently drafted.