Government funding boosts optimism for Grocery Code of Conduct’s success

The federal government, in collaboration with provincial and territorial counterparts, allocates $1.2 million in one-time funding to facilitate the implementation of the Grocery Code of Conduct.

Denise Allen, president and CEO of Food Producers of Canada, said, as the funding is now secured, the interim board will advance the implementation of the office of the adjudicator, which includes education and support services for all participating members.

“With time, we expect a more balanced relationship between suppliers and retailers, and for all players to be treated equally, and with fairness, regardless of enterprise size,” she said.

This announcement came after Walmart and Costco agreed to sign on to the voluntary Code, bringing all major Canadian grocers on board.

James Donaldson, CEO of B.C. Food & Beverage, acknowledged the extensive efforts invested in developing the Code, noting that its success depended on the involvement of major grocery retailers.

“A lot of work has gone into the development of this Code, but it was only ever going to work if major grocery retailers signed on, so this is a great development,” he said.

“We have been vocal throughout the process about the need for more provisions for smaller processors and will continue to ensure that this Code meets their needs. I believe that having a code is really important for industry and I am sure it will evolve,” Donaldson added.

Allen said that the Code is simple to understand, making compliance straightforward and business relationships easier.

“With less complexity in commercial dealings, innovation and investment in food production is favoured,” she added.

Michael Graydon, FHCP CEO and chair of the interim board responsible for the Code’s development, said in a press release that the funding will be used to hire an adjudicator and to set up an office for overseeing compliance and fair practices within the grocery industry.

The Code’s introduction was followed by a period of heightened scrutiny surrounding the grocery sector, particularly amidst rising consumer prices and allegations of unfair practices.

“The Code represents approximately three years of negotiation and broad consultation with the entire Canadian food value chain and is an important development for our industry,” Allen said.

However, since all the major Canadian grocers are on board now, the initiative is getting support from major retailers and stakeholders within the Canadian F&B industry.

Mark Taylor, president and CEO of Lactalis Canada, expressed his optimism about the Code’s potential impact, drawing parallels with similar initiatives in other countries.

“Having experienced first-hand the benefits of a Grocery Code in the U.K. … we must recognize this is a significant milestone as we strive to create an even stronger, more resilient and sustainable grocery supply chain for Canadians,” he said in a press release.

Taylor further said that Lactalis has trained nearly 200 people in advance to help employees understand the Code.

“To be ready to be compliant, we understand by June 2025, we need to act now and have brought a compliance team together to support the process,” he added.

Simon Laroche, president of Kraft Heinz Canada, shared the same sentiments while emphasizing the potential for the Code to stabilize an industry reeling from recent challenges.

“It creates a better trade environment for both the supplier and the retailer, but I think at the end of the day, the consumer is winning,” Laroche said in a press release.

Despite the positive reception from industry leaders, challenges such as ensuring compliance and demonstrating tangible benefits to consumers need to be addressed.

Dr. Sylvain Charlebois, senior director at the Agri-Food Analytics Lab, highlighted the need for continuous adaptation and improvement.

“While securing the commitment of all five major retailers is a commendable achievement, the real challenge lies ahead in ensuring compliance and tangible results,” Charlebois said in a press release.

As the implementation phase approaches, with a target deadline set for June 2025, the F&B industry must prepare and plan accordingly to meet compliance standards and achieve the Code’s intended outcomes.