Loblaw agrees to Grocery Code of Conduct

Following months of pressure from public interest groups and elected officials, Loblaw Companies Ltd. has announced it will support Canada’s Grocery Code of Conduct. 

In an effort to rein in inflation, the code sets rules for negotiations between suppliers and grocers and establishes a dispute resolution process. 

Large retailers like Loblaw and Walmart have argued that the code would lead to higher prices for consumers. Loblaw initially estimated that implementation of the code could lead to a $1 billion increase in food costs. 

On Thursday, the Canadian grocer changed course, announcing at its first supplier summit that it will support the code, stating that the decision “is part of Loblaw’s continued commitment to promoting a fair and transparent grocery industry in Canada.”

“We have worked intensively and collaboratively with industry groups so that the code is clearly drafted and fair for all industry participants,” said Loblaw President and CEO Per Bank in a statement. “We believe in the value of a code of conduct for the industry and are happy with the progress made. 

“The code now requires the participation of all major retailers and suppliers to help bring in a new era for Canada’s grocery industry, enhancing the relationship between retailers and suppliers, who both exist to best serve customers.”

The company said it would work with industry leaders as the code is completed and put into practice.

“It is welcome news that Loblaw has agreed to participate in the Grocery Code of Conduct,” Michael Graydon, chair of the interim board for the Code of Conduct, said in the Loblaw press release. “Within a very complex food system, the vision for the code has always been based on a fully inclusive, voluntary code, developed by the grocery industry and managed by its stakeholders across the supply chain. We are one step closer to the implementation of the code as we continue to work with all industry partners to ensure we have maximum participation by all stakeholders.”