It’s taken a few years and much discussion, but Canada’s Grocery Code of Conduct is getting ready for its debut.
Canada’s federal, provincial, and territorial agriculture ministers announced in July that all the grocery industry’s major players had agreed to sign on to the code, “bringing more fairness, transparency, and predictability to Canada’s grocery supply chain and for consumers.”
According to Food, Health & Consumer Products of Canada (FHCP):
A Grocery Code of Conduct is a set of rules agreed upon by stakeholders within Canada’s food supply chain, primarily retailers and suppliers, aimed at ensuring trust, fairness, and collaboration in their business dealings.
The code is the result of tension between retailers and suppliers over fees imposed by the former on the latter to keep their products on Canadian shelves. As per CBC’s quote from Mike Von Massow, a food economist at the University of Guelph:
Retailers are relatively concentrated in the Canadian market, and so… they can say to suppliers, ‘We control 15, 20, 30 per cent of the Canadian market – if you want access to those consumers, you have to give us cheaper prices, you have to pay us to be on the shelves, you have to pay other fees as we establish online grocery shopping, you have to accept 90-day payment,’ or whatever, so the retailers have exercised that power.
Similar codes implemented in Australia and the United Kingdom have had a stabilizing effect, leading Canadian politicians and industry leaders to look to similar solutions to their own domestic issues. The FHCP website states that the code will promote trust and collaboration through the value chain, increase commercial certainty, establish equitable dispute resolution, and recognize the unique needs of all grocery chain stakeholders, regardless of size.
Canada’s draft code includes three components:
- Guiding principles and trade rule provisions,
- A governance model, and
- A dispute resolution and adjudication process.
Although the agreement is indeed cause for celebration in the grocery sector, there are steps that must be taken before code implementation. These include establishing an adjudication office, finalizing operational details (including roles and responsibilities, complaint handling, and enforcement), stakeholder education and training, and developing a monitoring and reporting system.
Canada’s Grocery Code of Conduct website has a great deal of information available for the public and stakeholders interested in its progress. We recommend bookmarking the site, reviewing the FAQs and code documents, and monitoring our own blog for updates.
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