It was evident to the federal government as early as last fall that Loblaw and Walmart might be holdouts to the grocery code of conduct, jeopardizing the project's success. A Loblaws grocery store is shown at a Bowmanville, Ont. shopping centre on Tuesday Feb. 28, 2023. THE CANADIAN PRESS/Doug Ives
The federal government was aware last autumn that Loblaw and Walmart might resist signing the grocery code of conduct, potentially jeopardizing the project's success.
Documents obtained under access to information laws shed light on the government's attempts to persuade the two retailers to endorse the code. Cracks in their cooperation began to show months before a House of Commons meeting, where both companies expressed reluctance to sign the nearly finalized code.
Briefing notes from September 22, prepared for a meeting between federal agriculture minister Lawrence MacAulay and Quebec agriculture minister André Lamontagne, highlighted ongoing efforts to secure commitments from major players like Loblaw and Walmart to participate in the code. Participation by these large retailers was still uncertain at that time.
The code of conduct aims to establish agreed-upon rules for negotiations between industry stakeholders, including retailers and suppliers, and includes a dispute resolution mechanism. While intended to be voluntary, its success hinges on the participation of all major players.
Despite progress until last fall, concerns about Loblaw and Walmart's hesitation emerged. By late October, it became clear that their reluctance posed a risk to the code's successful implementation.
On December 7, leaders from Loblaw and Walmart informed a House of Commons committee studying food prices that they couldn't commit to signing the code in its current form due to fears it could increase prices. Loblaw's chairman, Galen Weston, referenced a letter the company had sent earlier, expressing concerns that the code might raise food prices for Canadians by over $1 billion.
The December 7 committee meeting publicly confirmed the two grocers' unwillingness to sign the code as drafted, according to Michael Graydon, CEO of the Food, Health and Consumer Products of Canada association. This revelation stalled progress on launching a grocery code adjudicator office, with hiring efforts for an adjudicator put on hold and funding requests pending.
Efforts to secure Loblaw and Walmart's participation were evident even before indications of their reluctance surfaced in October. Documents show meetings and discussions aimed at convincing the retailers to support the code.
Despite the setbacks, there's hope for a resolution. While discussions about making the code mandatory have arisen, MacAulay has stated that all federal options, including legislation, are being actively considered. The House of Commons committee has urged Loblaw and Walmart to sign on, warning of potential legislative action if they refuse.
Proponents of the code have countered claims that it could lead to higher retail prices. The industry steering committee has requested government funding to support the implementation of the grocery code adjudicator office, anticipating contributions from retailers and manufacturers to fund its operations.
Overall, while challenges persist, there's ongoing dialogue and efforts to address concerns and secure broad industry participation in the grocery code of conduct.
