Loblaw Questions Grocery Code of Conduct

Loblaw raises the affordability alarm as grocery code of conduct nears completion.
As the grocery code of conduct nears completion, Loblaw is raising concerns the guidelines could add fuel to the food inflation fire.
Specifically, Loblaw is worried the code could add $ 1 billion to its customers costs.
The company’s chief financial officer Richard Dufresne addressed the concern in a letter, requesting a special meeting of the industry sub-committee.
Loblaw spokeswoman Catherine Thomas said the draft code has challenges, which could risk product availability and increasing food prices.
Loblaw isn’t the only grocer to express concern about the code. Walmart Canada spokeswoman Sarah Kennedy said in an email in late October that the company supports initiatives benefitting customers but it’s “conscious of adding unnecessary burdens that could increase the cost of food for Canadians, especially during inflationary times.”
The federal government has been putting pressure on grocers to stabilize food prices after a run of high inflation and a series of interest rate hikes have restricted budgets.
Michael Graydon, CEO of the Food, Health & Consumer Products of Canada association and co-chair of the steering committee developing the code, urged the two companies to give the code a chance. Without them on board, the code will be less effective, he said.
The code is near completion, 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.
Loblaw’s letter mentions specific sections of the draft code, saying it would make it harder for retailers to hold suppliers accountable, create a lack of certainty in the supplier-retailer relationship, and pose risks to prices, availability and discount programs.
The committee developing the code was created in response to calls from the industry to address fees that large grocery retailers charge suppliers, an issue that surfaced publicly in 2020. That year, Walmart Canada announced a fee hike, and a national buying group representing Metro Inc. told suppliers it would expect the same. Not long after, Loblaw also raised its fees.
Metro and Empire Co. Ltd., which owns Sobeys, have affirmed their commitment to adopting the code.