All major Canadian supermarkets have committed to an industry code of conduct, paving the way for industry guidelines that have been in the works for several years.
Federal, provincial and territorial agriculture ministers made the announcement Thursday during their annual meeting in Whitehorse, saying the remaining holdouts, Walmart and Costco, have now agreed to sign the code.
“This is a positive step towards bringing more fairness, transparency and predictability to 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 Sobeys-owner Empire — is an “important milestone,” said Michael Graydon, chief executive of the Food, Health and Consumer Products Association of Canada and chair of the code’s interim board.
“It was critical that all retailers get involved because it is a very competitive business,” he said.
“It was an all-or-nothing situation. And I think everyone respected that and sat down to negotiate.”
The voluntary food code aims to level the playing field for suppliers and smaller retailers by providing guidelines for fair dealings.
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Progress on the code appeared to be in jeopardy last fall as it neared completion, with some major retailers saying they were not ready to sign on. Leaders of Loblaw and Walmart Canada told MPs at a House of Commons committee meeting that they were concerned the code would lead to higher retail prices.
As a result, calls for the code to be made mandatory have grown, with the House of Commons committee that studies food pricing telling Loblaw and Walmart in February that if they did not sign on, it would recommend the code be made law — an option the federal agriculture minister said he was exploring.
In May, Loblaw said it would accept the code as long as other industry players did the same, and said its concerns had been alleviated by changes to the document.
“The current code is fair and will not lead to higher prices,” Per Bank president and CEO said at the time.
Following Loblaw’s announcement, attention turned to Walmart Canada and Costco, but both retailers have now agreed to support the code.
Canada’s five largest supermarkets have been under intense public and political pressure as food 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.
Food traders have defended themselves against the accusations, telling MPs that their companies 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 stage,” Empire President and CEO Michael Medline told the committee in March 2023.
More recently, Bank and Loblaw chairman Galen Weston responded to what he called “misguided criticism” of the supermarket, as calls for a boycott gained traction online.
Grocery companies have also been expanding their discount coverage to meet growing consumer demand for lower prices, and those stores have been important drivers of sales growth.
Amid pressure on supermarkets to stabilise prices and comply with the food code, the Competition Bureau has also launched investigations into the parent companies of Loblaws and Sobeys for alleged anti-competitive behaviour.
The office is investigating the use of ownership controls in the sector, clauses in commercial leases designed to restrict other potential tenants and their activities. It says such clauses limit competition not only for small Canadian retailers, but also for potential foreign entrants into the sector.
Industry Minister Francois-Philippe Champagne has said he is looking for a foreign trader to come to Canada and help strengthen competition.
© 2024 The Canadian Press
