The controversial Canadian Grocer’s Code of Conduct is now ‘official’. Holdouts COSTCO and Walmart – the ‘discount’ shops among the Big 5 supermarket chains – have joined Loblaw’s, Metro and Empire in adopting the new ‘rules of engagement’…
What is the code?
The new rules and complaint resolution systems will address 4 main areas of concern:
- “Promote reciprocal trust and collaboration amongst grocery value chain partners, based on clear standards for fair dealing.”
- “Allow all parties governed by the Code to make informed business decisions in a context of commercial certainty, governed by clear agreements.”
- “Provide an effective, equitable mechanism for resolving commercial disputes.”
- …All the while keeping the process, “easy to understand, favouring simplicity and fairness over detailed rules and unnecessary complexity”.
What it isn’t
It’s not – alas – a prescription for lowering food prices, allowing millions of low-income Canadians to access healthier foods on their relentlessly tight budgets.
Perhaps it was too optimistic – or just plain naive – of me to expect any deal worked out between the government and the industry to include any guarantees for shoppers.
The long-debated provisions of the Code do seem to address issues that have caused problems along the food supply chain. But there are no terms or conditions to protect ordinary Canadians from unaffordable grocery prices. And that’s the issue that’s at the centre of the current food industry controversy.
Protests continue…
Two grassroots protests continue against Loblaw’s. The first, a call for shoppers to boycott the chain, and all the other stores it controls, is supposed to continue indefinitely. At the half-way point of the inaugural month, founder and chief organizer Emily Johnson said she had met with Loblaw’s CEO, Per Blank, but didn’t get firm commitments on any of the group’s demands.
Those included immediate reductions in food prices of at least 15 percent, and greater transparency about ‘shrinkflation’.
The other protest came to a head in May. Its anonymous organizers called on consumers to ‘steal from Loblaw’s’ on Mother’s Day. The idea was to put a crimp in the supermarket’s revenues, and profits, in retaliation against continuing high food prices.
The chain has since fought back, piloting several new ways to thwart thieves. But all those tests have done is infuriate the massive majority of honest shoppers.
To no one’s surprise – Loblaw’s has not admitted that the protests have had any affect at all on its business.
… While supermarket profits soar
Loblaw’s profits for the first quarter of this year somehow managed to increase by almost 10 percent over the previous fiscal quarter (Q4 2023). This, in spite of continuing high retail food prices, and increasing numbers of Canadians falling below the poverty line.
My take
The Grocer’s Code of Conduct was doomed to failure from the start, as a vehicle to cut food chain collusion and enhance competition. If anything, it could turn out to be a means for supermarket giants to ‘communicate’ with each other – coordinating ‘sales’ and fixing prices to their mutual advantage. And it could also lead to the nefarious supermarket practice of making brands pay ‘access fees’ to get their products on the shelves becoming an entrenched reality of the industry.
When will the Federal Government take substantive, effective action to force ridiculously profitable grocers to bring retail prices down?
~ Maggie J.