Canada’s new grocery code of conduct has been signed by 20 major food companies, including Danone and Unilever, as part of a push to enforce more rules on big grocers and combat bully tactics.

Sobeys parent company, Empire Co. Ltd., has officially signed on as the first retailer member of Canada’s new grocery code of conduct, with dairy product maker Lactalis Canada also joining as the first supplier member. The grocery code aims to promote fair dealings between grocers and their suppliers, including the application of penalties and fees. It is being developed to bring more transparency, fairness, and predictability to the industry.

The early registrations are a positive sign for the new code, expected to be fully operational by early next year. The impact of the new rules will not be immediately noticeable in stores, but if everything goes according to plan, shoppers will start to see more products from smaller food producers on shelves.

All of Canada’s major grocers, including Empire, Loblaw, Metro, Walmart Canada, and Costco, had confirmed their support for the voluntary code as of July 2024. However, this week marks the opening for formal registrations. The office’s president and adjudicator, Karen Proud, said formal recruitment efforts will begin this fall after the completion of the code’s final governance documents, such as its bylaws, operating rules, and a formal dispute resolution mechanism.

The code has a new website and member portal that offers access to guidance materials, updates, and a secure space for members to engage with the grocery code office. Membership dues will not be collected until the beginning of next year, meaning companies can officially register in 2025 without incurring any cost for the remainder of the year.

The launch of the code marks a key milestone in the process, as it allows people to sign up to the office, become members, become parties to the code, and submit and report informal issues that the office will start to look at. Henry Chambers, senior vice-president for Canada and the Americas at U.K.-based consulting firm Sentinel MC, said that the code does take time and that retailers are dealing with vendors in a completely different way than before the code.

Work continues before the expected ramp-up of code membership, including finalizing bylaws and operating rules setting out how the code’s office will function by the end of the summer. The office is also developing its dispute resolution mechanism, which will govern how complaints are addressed by the office, including consequences for violations of the code.

Empire CEO Michael Medline was the first major grocery executive to call for a grocery code of conduct to level the playing field for Canadian grocers and suppliers. The industry committee tasked with creating the code was established in response to contentious fees being charged to suppliers by large grocery retailers. The federal government warned it could make the code mandatory if all major players didn’t get on board.

Proud hopes the code’s implementation will create “more trust between players to really strengthen the Canadian grocery business.” While its outcomes could include helping smaller producers find more opportunities to get their products to market, shoppers shouldn’t expect the code to address issues that are out of its control.

Source: The Star
Source: Financial Post
Source: The Star