Proposed Canadian grocery code lays out process to resolve disputes, impose sanctions

OTTAWA -

Efforts to craft a Canadian grocery code of conduct have reached a major milestone with a proposed final version that includes a process to resolve disputes and impose sanctions on systemic violators of the code.

However, language in a copy of the proposed code obtained by The Canadian Press appears to stop short of imposing fines on companies that fail to adhere to its principles.

Still, Michael Graydon, co-chair of the steering committee overseeing the code, says the voluntary code has a number of potential deterrence measures to encourage compliance, such as potentially publicizing "consistent bad behaviour."

Graydon, CEO of supplier industry group Food, Health & Consumer Products of Canada, says the proposed code has teeth -- though they may not be as sharp as some had hoped for.

He says the grocery code is fundamentally about "good business practices," removing irritants from the grocery supply chain and creating more balance in the supplier-retailer relationship.

The industry committee working on the grocery code was established in response to contentious fees being charged to suppliers by large grocery retailers.

Gary Sands, senior vice-president of public policy for the Canadian Federation of Independent Grocers, says the code aims to treat all industry members equally.

"There's no distinction made as to whether you're a small player or a big player," he says. "Everyone's treated equally."

The industry-led grocery code of conduct was proposed as a way to address long-standing issues such as arbitrary fees, cost increases imposed without notice and late payments.

The code aims to offer retailers and suppliers a mechanism for how fees and fines are levied in the grocery industry, among other guiding principles.

A consultation process on the proposed code is open to food industry members until May 30.

This report by The Canadian Press was first published May 3, 2023.