Some of the biggest names in the food business have formally signed onto Canada’s new grocery code of conduct, a major milestone in a years-long push to impose more rules on big grocers and stamp out bully tactics in the industry.
Karen Proud, the watchdog appointed to enforce the code, said 20 manufacturers and retailers had signed on as of Monday. The list includes French yoghurt giant Danone and Unilever, the British multinational behind brands like Ben and Jerry’s ice cream, Dove soap and Hellmann’s mayonnaise. Sobeys’ parent company Empire and dairy processor Lactalis registered as the first members last week, though Proud isn’t planning a real recruitment campaign until the fall.
The early registrations are a promising sign for the new code, which is expected to be fully up and running by early next year. Most of the impacts of the new rules won’t be obvious in stores, Proud said, but if everything goes according to plan, shoppers will start to notice more products from smaller food producers on shelves.
“The hope is you may see more variety in the grocery store,” said Proud, who was announced as the code’s first adjudicator earlier this year. “We might be able to see more smaller players being able to grow their business.”
It’s not surprising that food companies are rushing to sign the code, since they were the ones who pushed for it in the first place. The big grocers have been more hesitant. Loblaw and Walmart spoke out against the code during a hearing on Parliament Hill in 2023, arguing it would drive up prices. But by last year, all five of Canada’s major grocery retailers — Loblaw, Empire, Metro, Walmart and Costco — had lined up in support.
Industry leaders have been in talks on a code since 2021, in response to a wave of mistrust and frustration with Canada’s biggest grocers during the pandemic. Manufacturers complained that the chains were using their dominance in the market to charge suppliers unexpected fees and fines for issues like late deliveries or short shipments, even as factories were struggling to stay open amid public health restrictions and COVID-19 outbreaks. At the time, Empire CEO Michael Medline said grocers and suppliers had “the worst relationship I’ve seen in my couple decades in retail.”
The code is supposed to establish a new normal, with rules and guidelines on what have been historic pain points in the industry, like when and how a grocer can charge fines and fees to suppliers. Grocers and suppliers can bring complaints to Proud’s office for adjudication, though the code’s full dispute resolution process isn’t expected to be finalized until the fall.
“We’ve seen enough to be confident where it’s headed,” Doug Nathanson, Empire’s chief development officer, said in an interview on Monday. “We also wanted to send a very strong signal to everyone … that we were going to stand behind this code.”
As of Monday, Empire was the only big grocer to have signed the code. But Proud said she wasn’t concerned, since the other chains aren’t likely to sign on until the code’s dispute resolution process is final.
“They’d be, in a sense, sort of writing a blank cheque without knowing what that process looks like,” she said. “I have spoken to all of the grocers. They are very much committed to this.”
Unlike the United Kingdom, where there adjudicator of the country’s grocery code recently launched an investigation into complaints that Amazon wasn’t paying suppliers on time, Canada’s adjudicator doesn’t have the power to investigate companies or fine bad actors. Instead, Proud said her power will come in “naming and shaming” companies that breach the code, by publishing her adjudication decisions.
Companies aren’t required to join the code by law, though advocates for the code have said it will only work if all major players volunteer as members.
“I am not feeling any pressure from any side to water things down at all,” she said, adding that if she does feel pressure, she’ll go public with her concerns.
