Grocery code of conduct nears finish line, but more work to be done

Grocery leaders are one step closer to sealing the deal on a code of conduct for the sector. 

The years-long endeavour by a steering committee representing a cross section of Canada’s food industry submitted a draft of proposed code components to government officials this month.

Committee members are in consultation with their respective boards on those draft components. In December, a draft code will be submitted to the federal, provincial and territorial ministers of agriculture, who are expected to reach a decision early in the new year.

Michael Graydon, CEO of Food, Health and Consumer Products of Canada and co-chair of the committee, says it's the “single biggest advancement” the group has made in more than a year. 

Components include trade rule provisions, a dispute resolution mechanism, an adjudication process, mediation and arbitration models and enforcement mechanisms, all intended to improve transparency, predictability and fairness in dealings between Canada’s retail, supplier and agricultural players.  

“The code will recognize the needs of all stakeholders in the grocery value chain, including the unique realities facing small and medium enterprises, as well as those of the Canadian marketplace,” Graydon says.

But on Nov. 18, Food and Beverage Canada (represented on the committee by chief executive Kathleen Sullivan on the committee) made the decision to withdraw from the project, saying the draft code doesn’t address the needs of smaller manufacturers. 

“It is FBC’s view that the code of conduct currently being developed will be insufficient to address the needs of Canada’s small and mid-sized food manufacturers,” the organisation says. “The system, as proposed, will place few limitations on specific retailer activities and rely heavily on retailers and suppliers negotiating clear contracts, without actually addressing the underlying imbalance of negotiating power.” 

It’s not the first time the development of the code has created friction. In July, the deadline was pushed to November after discussions around issues like scope, fines and fees, delisting and cost price increases hit a wall.  

“It's more important that we get this right than just to meet some date in the calendar,” Gary Sands, senior vice-president, public policy and advocacy, at the Canadian Federation of Independent Grocers, says.

As development on the code nears the finish line, Sands says the committee has made significant progress, but there’s still work to do around processes like adjudication.

“This is a very complex industry,” he says. “It's interdependent, it's interconnected and there's a lot of stakeholders with different views that have to be taken into account.”