TORONTO — Empire Company Limited, Canada’s second-largest grocery retailer (operator of Sobeys, Safeway, IGA, Foodland, Farm Boy, FreshCo, Thrifty Foods and Voilà), and Food, Health & Consumer Products of Canada (FHCP), the voice of Canada’s food manufacturing sector, have agreed to a proposal for a “Grocery Supply Code of Practice for Canada”. FHCP and Empire encourage other grocers, suppliers and industry stakeholders to come forward to support and provide input into this proposal.
The draft Code aims to stabilize relations between retailers and suppliers by calling for fair and efficient handling of all negotiations and commercial agreements. The FHCP has been advocating for a Code for the last two decades, as a result of complaints of unfair practices in the marketplace relating to issues such as arbitrary fees, cost increases imposed without notice, and late payments.
Empire agrees with the FHCP that the negative ripple effects from poor retailer-supplier relations make their way to consumers and can impact pricing, product choice and job opportunities in Canada. Ultimately, these practices create very challenging conditions for suppliers and manufacturers to thrive in Canada. The proposed Code will create an environment with more certainty and transparency, where suppliers can confidently invest in products, facilities, manufacturing and job creation in Canada.
“The Canadian grocery industry made unprecedented strides in navigating the COVID-19 pandemic as retailers and suppliers collaborated to protect the food supply chain and support customers like never before,” said Michael Medline, President and CEO, Empire. “This goodwill was a positive development during a difficult time. Let’s not go back to the old way of doing things. We began working in earnest with the FHCP on this values-based proposal in the fall of 2020. We hope our principled proposal will be a springboard to move our industry forward. This Code is a win for consumer product companies and retailers, as well as all other players in the food supply chain, including farmers and customers.”
The principles within the Code promote transparency, predictability and openness. By improving collaboration between the business partners, the Code will provide suppliers with certainty by setting out standard rules of engagement between the parties. The Code enshrines a set of good-faith industry business principles, such as requiring written agreements between large retailers and suppliers, ensuring changes to business terms are not imposed arbitrarily.