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Amid so-called “supply chain bullying” between major grocers and suppliers in Canada, a set of guidelines promoting transparency and fair dealing has been put in place.
The grocery code of conduct was created by government and industry leaders over the past two years “to jointly develop solutions that will ensure a better deal in store for everyone,” it says online.
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Its goal is to create more balance in industry’s supplier-retailer relationships, CEO of the Food, Health and Consumer Products of Canada Michael Graydon told CBC News in May 2023.
“This is not rocket science,” said Graydon, who is also co-chair of the steering committee overseeing the code. “This is just good business practice.”
A year after a finalized version of the rules were proposed, progress is being made.
What prompted the need for a code?
Processors, producers and independent grocers raised their concerns about the increased fees on suppliers to ministers in November 2020, according to the website dedicated to the code of conduct. They also underscored the need for balance in the supplier-retailer relationship.
This led to a collaboration between industry leaders and all levels of government.
A steering committee made up of 10 stakeholder associations — including the Retail Council of Canada, the Canadian Federation of Agriculture and Food Producers of Canada — worked on a plan alongside a sub-committee made up of food producers and retailers, like Metro and Vegpro.
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They presented updates to agricultural ministers on several occasions.
The information will be analyzed by an independent third party and shared with the steering and working groups. An update on progress will be provided to the federal, provincial and territorial agricultural ministers in late July, it says online.
Who has signed on?
Loblaw is the latest major grocer to commit to adopting the code of conduct, its president and CEO Per Bank said on May 16.
The initial reluctance of Loblaw (and retail giant Walmart) to join was due to the possible impact on customers, like increased food prices. But Loblaw said they were now confident signing on would not lead to higher prices, after six months of negotiations.
June 1, 2025, is the target date for the code to take effect, said Loblaw’s chief legal officer Nick Henn.
Metro and Sobeys have also committed to joining.
Walmart is currently not on board.
What does this mean for everyday shoppers?
On Friday, Prime Minister Justin Trudeau said Loblaw joining was a positive move for Canadians.
“Seeing the grocers sign on to good, responsible behaviour towards Canadians that they profit from every single year, that’s a big step in the right direction,” he said.
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Ministers Ministers Lawrence MacAulay and André Lamontagne said they believed that uniting the supply chain partners would lead to the best outcomes for all Canadians, in a joint statement on Thursday.
Meanwhile Gary Sands, senior vice-president of public policy for the Canadian Federation of Independent Grocers, agreed. Sands, also a member of the code’s steering committee, said they were hopeful in an interview with the CBC.
“We are optimistic … adapting certain principles in the industry will have a positive impact on costs and prices,” he said.
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