To justify his refusal to sign the code of conduct on which the Canadian food industry has been working for three years, the big boss of Loblaw, Galen Weston, submitted the Australian example to federal elected officials. The problem: it is wrong.
According to the manager, the third party responsible for enforcing the code of the country of kangaroos is favorable to suppliers who want to raise their prices in “practically 100% of cases”. This harms consumers and if a similar mechanism were to be adopted in Canada, retail prices would jump in our grocery stores.
Loblaw (Maxi and Provigo, in Quebec) calculates that the code of conduct, in its current form, could cause the price of food to jump by a billion dollars. “This risk is very real and constitutes in itself a reason to pause,” declared Galen Weston to the Standing Committee on Agriculture and Agri-Food (AGRI), on December 71.
His example, at the heart of his argument, seemed logical. Nobody contradicted him. But food industry experts who studied the Australian code in depth to develop the Canadian equivalent raised eyebrows.
This is the case of Mathieu Frigon, president and CEO of the Dairy Processors Association of Canada. “Either this is a made-up example, and I hope it is not, or he is talking about another Australian code that I am not aware of, but which would not be the code for the industry groceries because there is only one. »
Michael Graydon, CEO of Food, Health & Consumer Products of Canada (FHCP), the national association that represents supermarket suppliers, couldn’t believe his ears. He told me that he had read the Australian code “between 25 and 30 times”, which allowed him to know immediately that Galen Weston’s comments were “inaccurate”.
Disconcerted, the two men wrote to people involved in the drafting of the Australian code as well as to the independent dispute management organization to find out. The video recording of Galen Weston before the Agriculture Committee also made it to the other side of the Earth.
The one who adjudicates disputes between suppliers and supermarkets in Australia since 2021, Chris Leptos, described Galen Weston’s comments in the video as “erroneous”. The code of conduct for the food industry in Australia “does not provide a price negotiation mechanism”, he wrote to me, adding that it also does not agree with suppliers 100% of the time. The code has existed since 2015.
“I watched the Canadian recording and I’m just as baffled [bluffed] than you by the comments,” replied Samantha Blake, President and Deputy CEO of the Australian Food and Grocery Council (AFGC), to the FHCP.
Could it be that Galen Weston simply came to the wrong country? Mathieu Frigon, who knows the world’s codes well, doesn’t believe it.
“I don’t know where it comes from. […] The Australian code does not manage prices or cost increases for retailers at all. No other codes in the grocery store either. The UK code does not do this. And neither does the Canadian code that we developed. The third party in Australia would not be able to make decisions on things that are not in the code. »
Michael Graydon for his part assumes that Galen Weston may have been misinformed by his team, because the senior manager “can’t know everything.”
Hoping to solve the mystery, I asked Loblaw. Response: “We have spoken to executives in Australia’s food retail sector who have told us that the dispute resolution process has flaws and is currently under review. »
I doubt this explanation will ease tensions between Loblaw and the Task Force which is trying to provide Canada with a code of conduct. The tone of the exchanges by letter exudes irritation and impatience.
The Group recently wrote to the grocer saying it is concerned that its “unsubstantiated opinions” have found their way into the media. He tells him that some of his interpretations are “simply erroneous”, that his statements are “false”, that certain articles of the code are nevertheless “very simple” to understand.
Faced with such a gap, agriculture ministers across the country should decide to make the code mandatory. A large number of SMEs in the food processing sector would benefit from healthier relationships with large chains after decades of conflict that wear down their nerves and reduce their ability to innovate.
Contrary to what Loblaw claims, this code which aims to “resolve serious structural and behavioral problems” and to clean up commercial practices should also benefit consumers who precisely need a respite.