A new voluntary code of conduct for the grocery industry in Canada is scheduled for full implementation this Thursday. The code aims to ensure fair practices between grocers and suppliers, particularly concerning penalties and fees. It was established to enhance transparency, fairness, and predictability across the sector.
Administered by the Office of the Grocery Sector Code of Conduct, the code encompasses trade rule provisions, a governance framework, and a process for adjudication and dispute resolution. The five major grocers in Canada – Empire, Loblaw, Metro, Walmart Canada, and Costco Canada – have officially enrolled in the program.
As of January 1, the code, which has been gradually introduced, will be fully operational, including a mechanism for resolving disputes and addressing violations. Stakeholders can now lodge formal complaints, and the Canada Grocery Code office will begin collecting annual membership fees and issuing reports on industry trends, challenges, and proposed enhancements.
Despite the code’s focus on enhancing relationships within the industry rather than reducing food prices, experts are divided on its potential impact on consumers. The establishment of the industry committee responsible for the code was prompted by disputes over fees levied on suppliers by major grocery chains in 2020.
While the code does not regulate pricing or control shelf placement, it outlines specific guidelines and procedures for grocers and suppliers. Although this initiative is a first for Canada, other countries such as the U.K. and Australia have their own grocery codes in place.
Former Empire CEO Michael Medline was an early advocate for the code, emphasizing its potential to create a level playing field for industry participants. The code is expected to foster innovation, investment, and improved supply chain efficiency, leading to potential benefits for consumers.
Opinions vary on the code’s impact on prices, with some believing it could lower costs while others argue it may have the opposite effect by restricting grocers’ negotiation power. The code’s true influence on consumer prices remains uncertain, with data from other countries offering mixed conclusions.
Overall, the implementation of the grocery code of conduct in Canada is a significant step towards fostering better relationships and practices within the industry.