The new voluntary code of practice for Canada’s grocery industry came into force Jan. 1.
It provides an avenue for complaints to be heard but there are no penalties for failures to comply with the code of conduct.
There have been complaints from suppliers for at least 60 years. Fifty years ago complaints by Ontario growers of fruits and vegetables resulted in a judicial inquiry into dozens of discounts, fees and allowances the supermarket chains imposed on suppliers.
Justice James Leach concluded that nothing illegal was taking place and he rejected calls for a body to regulate relationships in the industry.
The government also reacted by closing the office it had in place to keep watch on the grocery industry.
But complaints persisted and boiled over when Canada’s three dominant supermarket chains announced they would discount supplier’s invoices by one or two per cent, effective immediately.
That eventually led to an inquiry by the House of Commons Committee on Agriculture which recommended creation of a code of conduct and a disciplinary system and body. Federal and provincial ministers of agriculture also recommended similar action when they met to discuss concerns over the clout practiced by the big chains.
But Loblaws and Walmart stoutly resisted mandatory rules and that eventually led to the new voluntary grocery code of conduct.
I don't expect anything much will change. The dominant supermarket chains will continue to pressure suppliers, suppliers will seek to defend themselves by merging into larger corporations and alliances and it will be the medium-sized independents which will suffer the most.
There will continue to be an erosion of competition in the food industry and both ends of the supply chain - farmers and consumers - will lose.
