Loblaw Cos. Ltd. said Thursday it is ready to sign the code of conduct for supermarkets, paving the way for an agreement that has been in the works for years.
After six months of negotiations, Loblaw president and CEO Per Bank said the retailer is now ready to sign, as long as other industry players do so.
“The code is now fair and will not lead to higher prices,” he said in an interview.
The code was developed by a group of leaders in the food industry, with the intention of leveling the playing field for suppliers and smaller retailers.
But that appeared to end last December when Loblaw and Walmart Canada said they would not sign the voluntary code because they feared it would raise prices for shoppers.
Nick Henn, Loblaw’s chief legal officer, said the underlying principles of the code have not changed.
“We felt that the words were not clear in many areas, so we spent some time with the working committee and the interim board, to resolve those areas, improve the code and provide the clarity we thought that it was missing last time. time,” he said in the same interview alongside Bank.
A key example involved the dispute resolution process, Henn said. Loblaw wanted to clarify when it would be appropriate to send issues to a jury, and when it would not – such as in the case of price negotiations between suppliers and retailers.
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“That was a big concern for us. And now that this is no longer a problem under the draft code, we are much less concerned that the code will lead to higher prices,” says Henn.
June 1, 2025 is the target date for the code to come into effect, he said.
“We’ve worked very hard to get to where we are today,” said Michael Graydon, CEO of the Food, Health & Consumer Products of Canada Association and chair of the code’s interim board.
Work can now continue on setting up the grocery code office, Graydon said, adding that he hopes this can begin “sooner rather than later.”
“We now have all the major grocers with the exception of one, so there’s some work to be done to bring them into the fold,” Graydon said, referring to Walmart. Costco has also had “some questions about certain aspects” of the code, he said, but he hopes they will also agree to participate.
Walmart Canada spokesperson Sarah Kennedy said the company “just received the latest version of the revised Grocery Code of Conduct, which has not previously been shared with us.”
“We will review it and determine next steps,” she said in an emailed statement. “As we have always said, we remain focused on the interests of our customers.”
Grocer Metro Inc. reiterated its support for the code, with spokeswoman Marie-Claude Bacon saying the company “believes that the participation of all grocers and suppliers is essential to its success.”
Gary Sands, a member of the code’s interim board and senior vice-president at the Canadian Federation of Independent Grocers, said he is “delighted” to have Loblaw on board.
“I think this gives us an important step forward,” he said.
“We still have some time to go to ensure we have all major stakeholders involved, but today is a real milestone.”
In recent months, calls to make the code mandatory have increased. In February, the House of Commons committee studying food prices told Loblaw and Walmart that if they did not agree to a voluntary code, the committee would recommend it become law.
During a May 1 conference call to discuss the company’s latest financial results, Bank had said he was “cautiously optimistic” that an agreement could be reached.
The call came on the same day some Canadians said they were going to begin boycotting all Loblaw stores as frustration grows over higher food prices and concentration in the grocery sector.
The boycott, organized by a Reddit group, is currently underway. Organizers placed several demands for their movement and at the top of the list was that Loblaw sign the code of conduct for supermarkets.
Negotiations over the code predated the boycott, Bank said, so the announcement “has nothing to do with their demands.” But he recently met with boycott organizer Emily Johnson and said he’s sure she’ll be happy to hear Loblaw has agreed to the code.
While food inflation is an industry-wide phenomenon, fueled by global pressures such as the war in Ukraine, Loblaw has become the example for many of food inflation in Canada.
The day after the boycott began, Bank and Loblaw Chairman Galen Weston pushed back on what they called “misplaced criticism” of the company.
“As a well-known company and Canada’s largest grocer, it makes sense that Loblaw would be chosen as a focal point for the media and government and, of course, consumer frustrations,” Weston said at the grocer’s annual meeting on May 2.
© 2024 The Canadian Press
