Grocery code launch being held back by dissent from some retailers: board report

After two years of work, the group responsible for developing the grocery code of conduct says its launch is being held back by a lack of support from all the major grocers. 

The interim board sent a progress report to the federal, territorial and provincial agriculture ministers on Wednesday.

“There is a concern that without the full participation of all major grocers, the implementation of the Code would create an unlevel playing field and put affected stakeholders at a competitive disadvantage,” the report reads. 

Without the support of all major grocers, the interim board said it can’t proceed in implementing the required steps to launch the code. 

The report obtained by The Canadian Press includes the latest draft of the code, and a draft of the bylaws for the Office of the Grocery Sector Code of Conduct. 

Recently, Loblaw Cos. Ltd. and Walmart Canada expressed concern that the code could raise costs for Canadian consumers. Executives from both companies spoke at a House of Commons agriculture committee meeting in Ottawa last week on stabilizing food prices.

Loblaw chairman Galen Weston told MPs the grocer will sign the code, but not in its current form, because of concerns it will give too much negotiating power to large multinational manufacturers. 

The grocer previously said the code could raise food prices for Canadians by more than a billion dollars. 

Walmart Canada chief executive Gonzalo Gebara told MPs that the company is not currently in a position to commit the code, because of “provisions that create bureaucracy and cost, cost that will inevitably end up on shelf prices.”

Executives from Metro Inc. and Empire Co. Ltd. have said they will sign the code. 

Metro president and CEO Eric La Flèche told the agriculture committee on Monday that the participation of all grocers and suppliers is essential to the code’s success. 

That day, federal Agriculture Minister Lawrence MacAulay, his provincial and territorial counterparts, and federal Industry Minister François-Philippe Champagne met to discuss food prices and the grocery code. 

In a statement, they said the government is exploring its options and that they’re disappointed that two major retailers have said they won’t sign on.

A steering committee with members from the food industry was createdto develop the grocery code of conduct. Now, with the office of the code incorporated, that committee has become the interim board of directors. 

The chairman of the interim board is Michael Graydon, CEO of the Food, Health & Consumer Products of Canada association, according to the report. The vice-chair is Diane Brisebois, president and CEO of the Retail Council of Canada.