Grocery Code of Conduct on the way for Canada

Canada is one step closer to creating a Grocery Code of Conduct in an effort to level the playing field for both producers and grocery stores.

The country’s agriculture ministers, along with industry leaders, met Friday to discuss the final details of the plan that would see a more fair, transparent relationship between retailers and producers.

“What we’re trying to do with this Grocery Code of Conduct is bring an end to the wild west and sort of have a sheriff in town,” said Gary Sands, the vice-president of the Canadian Federation of Independent Grocers.

The code would be mandatory and see governing rules implemented, something Sands believes would help smaller stores.

“Other, bigger retail chains will ask for all of the product or an increase in product, and if (producers) don’t supply that retail chain with that, there’s been a fee or a fine imposed,” he says.

That strategy results in smaller stores left with little to no supply. It’s an issue the government acknowledges as well.

“We have a few big retailers in the country and we had a lot of complaints from smaller food partners,” said Canada’s federal Agriculture Minister Marie-Claude Bibeau.

Those complaints are largely the result of hidden fees that have been imposed by giant companies, one expert claims.

“You have to pay hundreds of thousands of dollars to get listed and then you have to buy shelf space and other fees, but those other fees just keep coming out of the blue, all the time,” says Sylvain Charlebois, director of the Agri-food and Analytics Lab at Dalhousie University.

He says the unexpected costs have even driven some suppliers away.

“Processors just didn’t want to invest in Canada, at all, which limits the number of companies and competition, which would have brought prices lower,” says Charlebois.

He believes implementing the code would result in more suppliers looking to distribute in Canada. That could be good news for consumers, as more competition usually results in slight price decreases, Charlebois says.

He says the biggest win would be for smaller businesses to see a level playing field.

The government is now working on creating a governing body to oversee the rules and impose fines when necessary.

Australia and the United Kingdom have imposed similar codes, and with all of Canada’s agriculture ministers on board, Canada is one step closer to joining that list.