Grocery companies need to sign the code of conduct, MPs say

Governments should make it mandatory if they refuse

Ottawa—Loblaw and Wal-Mart Canada need to stop stalling and immediately sign and implement the Grocery Code of Conduct that the rest of the food business is supporting, the Commons agriculture committee says.

In letters to the CEOs of the two grocery retailers, the committee said stakeholders across the food supply chain believe that a refusal by any of Canada’s five large grocery retailers to participate in the Code will jeopardize its overall effectiveness. Should that happen, the committee recommends the federal and provincial governments adopt legislation to make it mandatory.

The Code has been developed within the food retail sector to give it greater commercial certainty, the committee letter said. The agriculture committee has been holding hearings on efforts to stabilize food prices, which have helped keep Canada’s inflation rate high.

While the two retail chains have expressed their hesitation over signing and implementing the Code, witnesses from across the agrifood supply chain have called for its speedy adoption, the committee said.

The Code will provide greater commercial certainty and fairer dealings for smaller and medium sized suppliers when negotiating sales to the large grocery companies, witnesses told the committee.

“As your chains are among the five large retailers that control an estimated 80 per cent of the Canadian retail food marketplace, the decision of either one of you to not participate in the Code will undermine its ability to address the challenges many suppliers experience,” the committee letter said.

While the two companies are concerned about how certain provisions of the Code may be enforced, the committee “has concluded that its immediate implementation is an essential step in tackling the issues facing Canada’s food and beverage sector.”

The committee agreed with the overwhelming majority of stakeholders that the Code’s implementation will provide stability to suppliers and retailers, as the implementations of similar codes in Australia and the United Kingdom have demonstrated.

Competition Bureau officials have told the committee that they do not have concerns related to its provisions. “While we would prefer that you adopt the Code voluntarily, we share the view that a decision by either of your firms to not participate in the Code would jeopardize its overall effectiveness. In such a case, the Committee will not hesitate to recommend that the federal and provincial governments adopt legislation to make it mandatory.”

This news report was prepared for National Newswatch.