Grocery leaders talk code of conduct at Western conference

With the first-ever code of conduct for the grocery industry on track to be implemented later this year, business leaders talked about what has been achieved to date and the big challenges ahead at CFIG's Grocery and Specialty Food West in Vancouver last week.

“The biggest accomplishment is that we didn’t kill each other,” joked Diane J. Brisebois, CEO of the Retail Council of Canada. “But on a serious note, that we were all able to stay at the table was a big accomplishment,” she said, noting that groups stuck it out and worked through some “very sensitive” issues.

Joining Brisebois on the panel was Michael Graydon, president and CEO of Food, Health & Consumer Products of Canada (FHCP) and Giancarlo Trimarchi, president of Vince’s Market and past chair of the Canadian Federation of Independent Grocers (CFIG). Moderating the panel was Gary Sands, senior vice-president of CFIG.  

In terms of challenges ahead, both Brisebois and Graydon agreed the biggest hurdle would be having all industry players, both large and small, participate in the code.

Education will be crucial, “so people fully understand the code,” said Graydon. “It’s about transitioning this from voluntary to participatory and getting as many people engaged as possible.” It’s going to take an enormous effort, but Graydon said he’s confident it can be accomplished.

Bringing forward an industry-led, single, national grocery code of conduct has been a years-long effort, which gained momentum about 18 months ago with the formation of a 10-person steering committee, comprised of representatives from across the industry, which have done much of the heavy lifting drafting the code. When implemented, the code will enhance transparency, predictability and fair dealing in grocery industry.

“It’s so much better than what we have today,” Graydon said of the proposed code, which builds in a dispute resolution process, with a third-party adjudicator should there be a requirement of intervention. Key provisions of the code centre around fair and ethical dealing with no punitive/vexatious acts (so no parties to the code can alter contracts unilaterally), commercial agreements, payments and good faith forecasting, ordering and allocation.

Speaking to a room of independent grocers, Vince's Market's Trimarchi said there is no callout in the code of "retailers" or "suppliers," rather there are "parties." And the reciprocity element of the code means, in simple terms, that all parties have equal responsibility to adhere to the provisions of the code. "For small independent retailers, we often feel we lack that power to be represented, and with large suppliers, we're often at a disadvantage," he said, noting that under the code there will be better communication between parties and a place to go to resolve issues. "There's a lot for the small guy and even the medium-sized independents, where I think we're given an opportunity to continue to be relevant and have a meaning and purpose in this industry."

READ: CFIG chair Dan Bregg on biggest challenges and opportunities for independent grocers

Trimarchi also noted willingness of those at the table to make compromises was “astounding” given the tensions that existed at the beginning of the process. “People involved quickly understood that compromise was going to be essential, otherwise we were just spinning our wheels,” he said, noting that those involved also understood “that this is a legacy project.”

FHCP's Graydon said the code represented "a cultural transformation" in the relationship between manufacturers, retailers and agricultural producers. "We've got to think differently in regards to the relationship that we have. We've got to take out some of the confrontational components and start to concentrate on how we can potentially build and grow our business."

Next steps? Consultation with the industry is taking place over the next several months to determine if any adjustments to the proposed code are necessary, after which the code will move into an implementation phase, if all goes to plan, later this year.