Canada To Launch A Grocery Chain Code of Conduct

A grocery-sector Code of Conduct comes into full effect on January 1^st within Canada’s very highly-concentrated grocery sector, designed to make the country’s retail food supply chain more transparent.  The new Code comes into full effect after about five years of development, although its implementation began earlier this past summer. Similar grocer-chains of conduct are in place in other countries, including the United Kingdom and Australia, which also involve standards meant to guide how retail grocers and their vendors interact.

This voluntary Code of Conduct was first investigated after food prices and product-stockpiling rose sharply in the early days of COVID.  Historic supplier-fee concerns, and the imbalance of retail clout within Canada’s highly-concentrated grocery sector have also been a concern for decades.  80% of Canada’s retail grocery sector is dominated by just five national grocery chains, with three of those holding a 50% share of the total grocery market across the country.

Karen Proud is the new president and chief adjudicator in the Office of the Grocery-Sector Code of Conduct, based in Ottawa.  Proud says that consumers should NOT expect grocery prices to drop simply because this new Code is in place.  She explains that the Code is mostly about leveling a playing field.

“All the grocers and suppliers came together and agreed upon the Grocery Code of Conduct," Proud noted.  "And our office is tasked with enforcing the Code, working with different parties to address issues that might arise through the Code. When you think about inflation, this grocery code is NOT going to fix that. We’re going to focus on education and making sure that people are ready for the Code to really be fully enforced.”

Food-chain analyst Sylvain Charlebois at Dalhousie University thinks this is especially good news for the smaller, independent grocers and suppliers who have always struggled to survive in a large, corporate grocery-chain environment in Canada.

“So, all five major grocers have actually signed on," Charlebois said.  "The other good news, independent grocers, we are likely to increase the chances for independent grocers to survive across the country. They’ll have access to more choices, offering different products. So, let’s hope that this works. And, I think it will actually increase investments in Canada, over time.”

This new Grocery Code of Conduct should also help Canadian farmers who have had problems dealing with or getting their products on the shelves of their local and regional grocery stores.  Proud says she hopes that fresh-market farmers, and all grocery store suppliers, will find this new Code helpful in their business dealings.

“There are farmers selling directly to grocery stores, and there are quite a few of those," Proud said.  "Understanding the Code and how it applies to them, I think, is really key. And this Code is really about the business-to-business relationships. We are here to help with providing resources to anyone who deals directly within the supply chain, to make sure they have the tools, within the Code, that are going to help them in their business dealings.”

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