It’s been years in the making, but Canada’s grocery code of conduct is now in full effect.
Enforcement of the code began today, marking the end of a seven-month transition period and at least five years of discussions, proposals and negotiations. The code, to which Canada’s five largest grocers have signed on, aims to promote fair dealing between grocers and their suppliers.
But what does that actually mean — and will it change anything for your bottom line? Here’s what you need to know.
What is the grocery store code of conduct?
The code is a voluntary framework that establishes rules for the relationship between grocers like Loblaw, Metro and Sobeys, and suppliers like Kraft Heinz, Chapman’s Ice Cream and General Mills.
Its goal is to create a level playing field between the two sides, setting rules and guidelines around the contentious points in the relationship between suppliers and grocers. That includes when and how a grocer can charge fees to a supplier. It also includes an adjudication and dispute resolution process.
Why was the code needed?
For years, small- and medium-sized suppliers have said there is a growing power imbalance with the country’s largest grocers, one that was only widened by the COVID-19 pandemic. Suppliers said they faced rising fees to access store shelves, months-long payment delays and the threat of being delisted at any moment, alongside other challenges, the Star’s Ghada Alsharif reported in 2023.
As a result, some suppliers couldn’t get on the shelves of major grocery chains. Others simply went out of business. Experts and industry groups worried the soaring costs would lead to less and less selection on the shelves for shoppers.
“It’s a systemic industry issue that comes from having dominance and power,” Michael Graydon, CEO of supplier industry group Food, Health & Consumer Products of Canada, told the Star in 2023.
Why did it take so long?
While Empire, the parent company of Sobeys, championed the code and became the first retailer to sign on, some of Canada’s largest grocers campaigned against it. Galen Weston, chairman of Loblaw, told the House of Commons agriculture committee in 2023 it would lead to “significant risk of higher prices and empty shelves.”
“It’s going to unlock and empower the largest multinationals in the world who are already standing in the way of lower food prices for Canadians,” Weston said.
Walmart Canada also opposed the code. But by July 2024, all five of Canada’s major chains — Loblaw, Empire, Metro, Walmart and Costco — had signalled their support.
Bylaws and operating rules for the code’s governing office were finalized in 2025 as suppliers completed final preparations.
“The code does take time,” Henry Chambers, a senior vice-president at U.K.-based consulting firm Sentinel MC, told The Canadian Press in July. “It’s not an instant flick of a switch to go, ‘Everyone, you were behaving like this, you now behave like that, now behave yourselves and carry on,’” he said.
Wait, the code isn’t mandatory?
Nope. Signing on to the code is completely voluntary.
However, the federal government warned it could make the code mandatory if major players didn’t get on board. Since then, all five major chains have registered.
Will it lower my grocery bill?
It remains to be seen. But it’s important to note that the goal of the code is not to make things cheaper for consumers; it is to improve relationships between suppliers and grocers.
“The code does not regulate pricing, control shelf placement, or limit companies’ ability to negotiate tough commercial terms,” the Office of the Grocery Sector Code of Conduct says on its website. “It is a behavioural code, not a pricing or cost-management tool.”
Some, like the president of Kraft Heinz Canada, say the code could help stabilize food prices after years of steep grocery inflation. Gary Sands, senior vice-president at the Canadian Federation of Independent Grocers, believes the code will have a positive impact on prices.
But will I at least see more products on the shelves?
That’s what the watchdog appointed to enforce the code, Karen Proud, is aiming for.
“The hope is you may see more variety in the grocery store,” Proud told the Star in July. “We might be able to see more smaller players being able to grow their business.”
If all goes to plan, there will be more products from smaller producers on the shelves.
