Tuesday, May 4, 2021

Sobeys offers suppliers a code of practice

Sobey’s supermarket chain has dangled an olive branch to suppliers who feel badgered by the clout of Canada’s supermarket chains.

It has adopted a code of practice developed jointly with the Food Health Consumer Products Canada association.

Grocery consultant Peter Chapman said suppliers are cautious, most saying they want to wait and see what evolves.

Tensions have always existed between fruit and vegetable growers and the big chains, but they reached a boiling point in 2020 when when Walmart suddenly and arbitrarily announced new fees, including an across-the-board two per cent cut in payments.

Loblaw and United Grocers, which buys for Metro and Save-On among others, followed soon after.

Suppliers had little choice unless they wanted to give up access to more than half of Canadian shoppers.

Sobey’s new code of practice is based on five guiding principles and has 14 sections dealing with issues such as payments, deductions and changes to agreements.

There is also provision to take issues higher.

Chapman writes in The Grower newspaper that supermarkets are not always the culprits.

For example, he said failures to deliver on schedule can disrupt operations at the supermarket or its distribution centre, costing time and money.

He also said things got better when COVID-19 hit and both suppliers and supermarkets realized how much they need a good relationship to get a steady supply of fresh fruits and vegetables for consumers.

Chapman said he doesn’t know whether other supermarkets were consulted about joining the initiative to launch a code of practice, nor what their reaction might be.

But they are clearly under political pressure after all of Canada’s agriculture ministers announced a few months ago that they are disturbed about how the supermarket chains have been treating farmers, so they are working on their own code of practice.