House committee tells Loblaw and Walmart to sign grocery code or risk legislation

A House of Commons committee studying food prices has issued a stern warning to retail giants Loblaw and Walmart in a letter on Friday, urging them to sign on to the voluntary grocery code of conduct. The committee stressed that the immediate implementation of the code is crucial in addressing challenges within the food industry. Failure to comply may lead the committee to recommend legislation, making the code mandatory.

Committee chair Kody Blois conveyed the committee's stance, emphasizing that if Loblaw and Walmart opt out, the committee won't hesitate to propose federal and provincial legislation to enforce the code. The industry-created code aims to establish fair rules for negotiations between suppliers and grocers.

Both Walmart and Loblaw have expressed reservations about signing the current code, citing concerns that it could result in higher prices for Canadian consumers. Loblaw spokeswoman Catherine Thomas stated that the grocer's priority is to ensure the code benefits everyone, particularly consumers. She emphasized Loblaw's commitment to collaborating with the industry to create a code based on reciprocity, fairness, and good faith dealings across the supply chain.

Walmart did not immediately respond to requests for comment on the matter.

Over the past year, the committee has interrogated major grocers on their profits during inflation, their efforts to stabilize prices, and their stance on the grocery code of conduct. Proponents argue that the code will level the playing field for suppliers and smaller grocery companies, asserting that large retailers like Loblaw and Walmart currently hold disproportionate power in negotiations.

The committee contends that without the participation of either Walmart or Loblaw, the effectiveness of the code would be compromised. The letter underscores the committee's belief that the code's implementation will provide stability to suppliers and retailers, drawing parallels with similar codes in Australia and the United Kingdom.

Michael Graydon, CEO of the Food, Health & Consumer Products of Canada association and chairman of the interim board overseeing the code, stressed the importance of government intervention if Walmart and Loblaw refuse to participate. He asserted that the voluntary program has been pursued vigorously, but if necessary, regulatory measures should be taken.

In December, Metro expressed willingness to sign the code, emphasizing that its effectiveness hinges on the participation of all companies in the industry. While the code is designed to be voluntary, some advocate for legislation to ensure universal compliance.

Federal Agriculture Minister Lawrence MacAulay, expressing disappointment at the industry's impasse, revealed that federal options, including legislation, are being explored. Graydon reiterated the committee's resolution, emphasizing the need for government intervention if voluntary efforts prove futile.

Gary Sands, a member of the code's interim board and senior vice-president at the Canadian Federation of Independent Grocers, welcomed the committee's stance, expressing support for legislation if industry-designed and led efforts fall short due to lack of corporate support. The committee's resolute recommendation for legislation underscores the urgency of addressing the issues within the Canadian food industry.