Canadian government could make grocer code of conduct mandatory

Canada’s House of Commons committee is urging Walmart Canada and Loblaw to sign the voluntary grocery code of conduct. If they don’t, the code could be legislated. 

The committee told the chief executives at both chains that it believes the immediate activation of the code of conduct is an essential step in tackling the issues facing the food industry, including inflation. 

“We share the view of 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,” said the House of Commons committee in a letter to Walmart Canada and Loblaw. 

Legislation could be adopted to make the code mandatory. 

The code was created to establish a set of rules to level the playing field during supplier and grocer negotiations. 

Walmart Canada and Loblaw, which have had issues with the code for months, are refusing to sign the guidelines in the current format because they believe it will lead to higher food prices. 

Loblaw said it remains committed to working with the industry on a code that is reciprocal, fair, and based on good faith dealings across the supply chain. 

Walmart Canada said it has reservations about the code but will continue to work to make it right. 

Officials say both Walmart Canada and Loblaw have been using their power to influence suppliers, but they agree without the two major retailers signing on a code of conduct does not work.

The Canadian government has been pressing grocery executives on the price of food since last year, and at one point there was a price freeze that has since been lifted.