Costco and WalMart Canada have finally agreed to a national code of practice for the grocery industry, but it fails to address scores of fees supermarkets charge suppliers.
Loblaws was also a holdout, saying it would not sign until Costco and Walmart do.
Now the code has support from all major supermarket chains and food suppliers.
The federal, provincial and territorial ministers of agriculture have been pushing for a grocery industry code of practice for almost three years.
The Office of the Grocery Sector Code of Conduct interim board of directors reported Costco and Walmart approvals to Canada’s federal, provincial and territorial agriculture ministers while they were meeting this week.
The new code is expected to be implemented by June of next year.
The board needs to hire an adjudicator who would manage any disputes arising under the code, establish an office to oversee it, and educate people across the industry about the code’s requirements.
“This has been a long process, but we are now able to move forward to implementation which we believe will strengthen the relationship between all stakeholders involved and continue to provide Canadians with a healthy and robust food supply chain,” the board wrote in its report.
“We all have been really focused on trying to get a voluntary code, because we highly believe that industry should be running this and not government,” said Michael Graydon, co-chair of the steering committee developing the code and chief executive officer of Food and Consumer Products of Canada, which represents manufacturers.
In the spring, Loblaw asked for changes and clarifications to some of the wording in the code, including a specification that grocers are entitled to reject requests for cost increases from suppliers, without it leading to such a dispute going before the code’s third-party adjudicator in an attempt to force their hand.
Loblaw also asked for more details on how dispute resolution would work, and how any future changes to the code would be made.
Loblaw is the nation’s largest supermarket company with many banners such as Zehrs, T&T, Independent , No Frills, Valu Market and Superstore.
The code would not prevent retailers from charging the kinds of fees that have caused conflicts with suppliers in the past, and which are ongoing.
The Globe and Mail reports that on July 3, Sobeys sent a letter to some of the suppliers who deliver products directly to its stores, announcing a five per cent deduction that will apply to all their products starting on Sept. 2.
The letter, said the deduction would offset “billing and invoice management” expenses.
The change is ensuring consistent rates are charged to the subset of Sobeys’ suppliers who deliver direct to stores, said Sobeys spokesperson Karen White-Boswell wrote in an emailed statement.
