Canada’s largest supermarket combine had been holding off on signing the federal government’s Grocer’s Code of Conduct. They said it was bad for business and would not lower food prices. But now, Loblaw’s says it WILL sign onto the deal…
Loblaw’s surprised everyone involved yesterday, announcing it will sign onto the much-discussed Grocer’s Code of Conduct. The supermarket chain had maintained, up to last week, that the Code, as it stood, was bad for the grocery business and bad for consumers. And they claimed it would not lower food prices.
Talks have been ongoing with all 5 major Canadian grocery chains since last fall, when the first draft of the Code was released to the industry. Loblaw’s Chief Legal Officer, Nick Henn said the underlying basic principles of the code haven’t changed, but the wording has, in some key places. The last holdout is Walmart, which says it didnt’t receive the latest draft of the Code until a few days ago. And hasn’t had a chance to go over it in detail.
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 about consumers?
What the Code doesn’t do is address the needs, concerns and rights of consumers. 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 all this month. At the half-way point, 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, extension of ‘members only’ deals to all shoppers, and greater transparency about ‘shrinkflation’.
The other protest came to a head last weekend. 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.
Loblaw’s – to no one’s surprise – has not admitted that the protests have had any affect at all on its business.
Meanwhile… 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 whole Code of Conduct and parallel protest situation has hammered home to me one overriding fact: The Code is designed to protect members of the food supply chain from unfair action by other members – not to protect consumers.
Any benefits to shoppers will come only as secondary consequences of dealings between the supply chain players. The Code says nothing about controlling retail food prices and nothing about ensuring fair dealing with consumers.
Once again, a mega industry, with a defacto monolpoly in its market, has subverted the government by massaging an important new regulatory code until it no longer materially affects their operations or their profits.
And it seems nobody in positions of power or influence cares about the plight of increasing numbers of Canadians faced with the choice of paying their monthly bills, or being able to afford sufficient food for their families.
The much vaunted and debated Grocer’s Code of Conduct is, to me, a huge disappointment. Government now MUST follow up with major new measures to protect consumers.
~ Maggie J.