Grocery giant Loblaw announced Thursday that it is endorsing the grocery code of conduct, paving the way for a deal that has been years in the making.
After six months of negotiations, Loblaw Companies President and CEO Per Bank said the retailer is now ready to sign, provided others in the industry do as well.
“The code is now fair and it will not lead to an increase in prices,” he said in an interview.
The code was developed by a group of food industry executives, with the aim of leveling the playing field for suppliers and small retailers.
But the project appeared to grind to a halt last December when Loblaw and Walmart Canada said they would not sign the voluntary code because they feared it would raise prices for consumers.
Loblaw’s chief legal officer, Nick Henn, said the underlying principles of the code have not changed.
“We felt the words were unclear in many areas, and so we spent time with the working group and the interim committee, correcting those areas, improving the code and providing the clarity that we believe was missing last time,” he said during the same interview alongside Mr. Bank.
An important example concerns the dispute resolution process, mentioned Mr. Henn. Loblaw wanted to make it clear when it would or would not be appropriate to refer an issue to an arbitrator, such as in the case of price negotiations between suppliers and retailers.
“It was a big concern for us. And because it’s no longer an issue under the proposed code, we’re much less concerned about the code leading to higher prices,” Henn said.
The date set for the code to come into force is 1er June 2025, he said.
Waiting for Walmart
“We’ve worked very hard to get to this point,” said Michael Graydon, CEO of the Food, Health and Consumer Products Association of Canada and co-chair of the steering committee responsible for developing the code.
Work can now continue to establish the Grocery Store Code of Conduct Office, Graydon noted, adding that he hopes it can begin “as soon as possible.”
“We now have all but one of the major grocers, so there’s still work to be done to integrate them,” Mr. Graydon said, referring to Walmart. Costco has also had “some inquiries about certain aspects” of the code, he said, but he hopes they will agree to participate as well.
Walmart Canada spokesperson Sarah Kennedy said the company “just received the latest version of the revised Grocery Store Code of Conduct, which was not previously communicated to us.”
“We will review it and determine next steps,” she commented in an emailed statement. As we have always said, we continue to focus on the interests of our customers. »
For its part, Metro reiterated its support for the code. Its spokesperson Marie-Claude Bacon said the company is “convinced that the participation of all grocers and suppliers is essential to its success.”
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.
Federal Agriculture and Agri-Food Minister Lawrence MacAulay and his Quebec counterpart, André Lamontagne, issued a statement Thursday saying that with Loblaw’s adherence to the code “we are calling on all other major retailers to do what is in the best interest of Canadians and to follow this example. »
In a message shared on the social network
“Nothing to do” with the boycott
Speaking on a conference call on 1er May to discuss the company’s latest financial results, Mr. Bank said he was “cautiously optimistic” about the possibility of reaching an agreement.
The call came the same day some Canadians announced they would begin boycotting all Loblaw-owned stores as discontent mounts over rising food prices and consolidation in the grocery sector.
The boycott, organized by a group on the Reddit network, is still taking place. Organizers made several demands for their movement and the one at the top of the list was that Loblaw sign the grocery store code of conduct.
Negotiations on the code predated the boycott movement, Bank said, so the announcement “has nothing to do with their demands.” But he recently met with boycott organizer Emily Johnson. Mr. Bank says she would surely be happy to learn that Loblaw has accepted the code.
Although food inflation is an industry-wide phenomenon, many triggered by global pressures like the war in Ukraine, Loblaw has become the epitome of food inflation in Canada.
The day after the boycott began, Mr. Bank and Loblaw Chairman Galen Weston pushed back against what they called “misguided criticism” of the company.
“As a well-known company and Canada’s largest grocer, it is natural for Loblaw to be the focus of media and government and, of course, consumer frustrations,” Mr. Weston said at the annual meeting of the food giant, May 2.