A new voluntary grocery code of conduct for grocers, suppliers, wholesalers, and primary producers in Canada is scheduled to be fully implemented this Thursday. The objective of this code is to enhance fair practices between grocers and their suppliers, particularly regarding penalties and fees. This initiative aims to introduce greater transparency, equity, and predictability across the 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 resolving disputes. Notably, the five major Canadian grocers, including Empire, Loblaw, Metro, Walmart Canada, and Costco Canada, have officially enrolled in this initiative.
Effective January 1, the code, which has been introduced in phases, will be fully operational. This includes the mechanism for resolving disputes, addressing complaints, and imposing penalties for violations. Stakeholders such as grocers, suppliers, and other industry members can now lodge formal complaints. The Canada Grocery Code office will also commence collecting annual membership fees and publishing yearly reports highlighting industry trends, systemic challenges, and proposed enhancements.
Despite the code’s focus on fostering better relationships among industry players rather than lowering food prices, experts have differing views on its potential impact on consumers. The genesis of this code lies in the industry committee’s response to controversial fees imposed on suppliers by major grocery retailers, a contentious issue that came to a head in 2020.
While the code does not regulate retail food prices or control commercial terms, it does establish specific guidelines and protocols for grocers and suppliers. This includes detailed regulations concerning fees and the process for resolving disputes in cases where mutual agreements cannot be reached.
Although this code marks a first for Canada, similar grocery codes exist in other countries such as the U.K. and Australia. The code’s ultimate impact on prices remains a topic of debate, with various stakeholders offering contrasting opinions on whether it will lead to price reductions or increases in the long run.