Loblaws is saying that a code of conduct requiring supermarket chains to deal fairly with suppliers would be too costly.
In a statement, Loblaw spokeswoman Catherine Thomas said the draft code has “a number of challenges,” which the grocer believes could risk product availability and increasing food prices.
The Loblaw statement also mentioned the potential “$1 billion in costs,” whichThomas said refers to extra costs for Loblaw customers.
This code is under discussion by a steering committee. The federal, provincial and territorial ministers of agriculture have also been involved in working on a code of conduct for more than a year.
Work on a code began after one of the five major chains announced that it would retroactively require suppliers to discount their invoices by one per cent. The other four quickly followed suit.
It was the second time the chains imposed a discount on invoices.
The chains have said they can work with a code that is voluntary, but object to one that has teeth to back it up.
Walmart and Loblaws are both on record now saying the code would be too costly. Metro and the Empire Group have said they would comply.
Michael Graydon, chief executive officer of the Food, Health & Consumer Products of Canada association and co-chair of the steering committee developing the code, said there is no evidence to back Loblaws’ claim that it would cost consumers $1 billion.
He said the two companies should give the code a chance. Without them on board, the code will be less effective, he said.
“Sign on, be active participants, be engaged,” Graydon said.
“But to just continue to sit on the sidelines and throw rocks at the process … it’s not in the best interest of the industry.”
The code is near completion, Mr. Graydon said, with plans to have it and the non-profit organization overseeing it up and running by the end of the first quarter of 2024.
Metro, which owns Food Basics, and Empire which owns Sobey’s, Freshco and Farm Boy, said they support the code. The fifth major chain, Costco, has not commented.
“In July, Federal, Provincial, and Territorial Ministers were briefed on the significant progress made during industry consultations held in May 2023, and remain united in calling for all key players in the industry, including large retailers, to participate in and support the operation of the code,” federal Agriculture Minister Lawrence MacAulay told the Glob e and Mail.
