Loblaw to Support the Grocery Code of Conduct

Loblaw Cos. Ltd. said it’s ready to sign on to the grocery code of conduct, a major milestone for an agreement several years in the making.

The grocery code of conduct is a voluntary, industry-led initiative to provide guidelines for fair dealings between grocery retailers and their suppliers. Proponents of the code say it will level the playing field for suppliers as well as for smaller grocery retailers.

Last December, Loblaw and Walmart Canada said they wouldn’t sign the code as drafted over concerns it would raise prices for Canadians at the grocery store. A House of Commons committee studying food prices told the two grocers that if they didn’t agree to the code, the committee would recommend that the code be made mandatory.
Loblaw said the new version of the code includes clearer language that it now feels is fair and won’t lead to higher prices.

Walmart Canada says it’s received a copy of the new drafted code and will be reviewing it.

Metro and Empire, the other two major Canadian grocers, have already committed to the code, though both have said it needs the participation of all major players to work.

Michael Graydon, the chairman of the interim board for the code, said Costco has had “some inquiries around certain aspects” of the code, but he hopes it will also agree to participate.

Some Canadians have chosen to boycott all Loblaw-owned stores during the month of May in a movement that began on Reddit. Among the group’s demands was a call for Loblaw to agree to the grocery code of conduct.

Work on the code began before food inflation started to take off in Canada, and it wasn’t pitched as something that would affect retail prices. But with customers feeling the pinch of food inflation and increasing pressure on politicians to do something about it, talk of the code has become intertwined with the issue of grocery prices.

Though Loblaw previously said it thought the code could raise grocery prices by more than a billion dollars, proponents of the code pushed back, even suggesting it could do the opposite.

Empire Co. Ltd. chief executive Michael Medline said he wouldn’t have supported the code if he thought it would put upward pressure on prices.