Half a dozen national associations representing food-processing companies and farmers are asking governments to implement a code of practice to reign in the abuse of power by Canada’s biggest supermarket chains.
What triggered this call was an announcement by WalMart Canada that it would be implementing a one per cent discount on what it will pay for supplies.
Loblaws, Sobeys and Metro soon copied the squeeze.
The food processors say this weakens an already weak sector in the Canadian economy and will eventually reduce farm incomes and hit the pocketbooks of Canada’s poorest people.
They are asking federal and provincail governments to take a lesson from the United Kingdom which has implemented a code of practice.
“This is an issue of strategic importance for Canada's food security. We therefore call on the federal and provincial governments to implement a code of practice in Canada to check this arbitrary conduct from large grocery retailers, review all current fees, penalties, and after sale deductions, and to protect Canada’s agri-food industry."
They note that the U.K. Competition Commission 2008 final report on supplies of groceries: “... found that the transfer of excessive risk and unexpected costs by grocery retailers to their suppliers through various supply chain practices if unchecked will have an adverse effect on investment and innovation in the supply chain, and ultimately on consumers.”
This is not the first or only time suppliers have pleaded for government intervention.
In the mid-1970s, the Ontario government held an inquiry into discounts, rebates and allowances the supermarket chains ran to the detriment of suppliers.
Led by the Ontario Federation of Agriculture, farmers and suppliers called for a public watchdog.
What they got was less than nothing. The Ontario government abolished the office it did have in place.
The associations making the call now are the Canadian Federation of Agriculture, the Canadian Beverage Association, Food and Beverage Canada, Food and Consumer Products of Canada and Dairy Processors Association of Canada.
The associations making the call now are the Canadian Federation of Agriculture, the Canadian Beverage Association, Food and Beverage Canada, Food and Consumer Products of Canada and Dairy Processors Association of Canada.
