Cracking the code

The long-standing goal of achieving a code of conduct for the grocery industry is closer to becoming a reality than ever before.

“I believe we’ll have a code this year,” said Gary Sands, senior vice president of the Canadian Federation of Independent Grocers (CFIG) and a member of the steering committee working on a code to establish rules around how food suppliers and retailers should conduct business with each other.

While the end of March was the original deadline to have a code in place, Sands said the 10-member committee—comprised of representatives from the Retail Council of Canada, Food and Health Products of Canada, Canadian Produce Marketing Association and others—are agreed that it’s more important to get it right than meet a deadline. “We’re not going to just try to meet some arbitrary date in the calendar. We want to make sure we’re very careful,” he said. “This is a complex industry. We want to make sure there are no unintended consequences.”

Sands made the comments while moderating a panel discussion at CFIG’s Grocery and Specialty Food West show in Vancouver earlier this week. The panel included Giancarlo Trimarchi, partner at Vince’s Market and current chair of CFIG; Erin Higdon, vice-president at Atlantic Grocery Distributors (AGD); and Ron Welke, associate vice-president, food at Federated Co-operatives Limited (FCL).

All three panellists are part of a grocery code of conduct working group tasked with exploring key issues that include written versus non-written agreements; scope (the scope of products that should be included in the code); fines and fees; and any other practices and issues that need to be addressed.

While CFIG has long advocated for a grocery code of conduct, Sands emphasized that establishing one is not just a CFIG issue, it’s an industry issue. He added that whatever code is adopted will need to be mandatory and enforceable. “We don’t want this to be government regulated. We want the industry to come up with a solution and a solution that works.”

So what are the crucial principles the code should include? AGD’s Higdon said it was difficult to pick just one, but pointed to fair dealings and transparency. “Ensuring that there’s mutual agreement and then ensuring that when we have those agreements we can count on those agreements to hold,” is key, she said.

Fair supply was another crucial issue. “It’s an issue that’s become a larger problem during the pandemic as our supply chain has come under significant duress,” said Higdon. And as an organization that serves remote communities with a lot of the Indigenous partners, “it can’t be overstated that the need for the code to address a fair and equitable supply is just so critical to achieving much-needed food security.”

In addition to ensuring a fair and equitable supply of goods, FCL’s Welke said it was “very important” for the code to include an effective dispute resolution process that holds all parties accountable. Having “teeth” in the code will help us all compete, he said. We all do our best to negotiate and come up with great agreements, he said, but we need a mechanism in place to hold those folks accountable who do not honour agreements.

While Trimarchi agreed with Higdon and Welke, he said he believed a grocery code of conduct would also have a positive impact on independents new to the industry and smaller operators looking to grow their business. Having established rules of engagement, he reasoned, would provide a broader understanding of how the industry works.

“Components of the code are going to talk about things like fees and fines, contractual certainty, things a single-store operator or a small independent doesn’t even have time to think about,” said Trimarchi. “It will provide the next generation of independent grocers with a wonderful base of how to do business. Again, it won’t level the playing field, but it will provide a transparency for how the game is actually played.”