Question Period Note: GROCERY CODE OF CONDUCT

Q1 – Will a grocery sector code of conduct increase food prices? Q2 - Will funding be provided to support timely implementation of the code? Q3 – Will key industry players adopt the code?

R1 - The code of conduct is an important part of a solution that will improve the strength and resilience of Canada’s food supply chain.

It’s the unpredictability and lack of transparency in how fees are levied, along with limited and often complex recourse for dispute resolution, that has led to the strained supply chain relationships we have today.

While not directly affecting food prices, the code will improve predictability and transparency in supplier-retailer relations, which will ultimately benefit consumers. R2 - The Industry Steering Committee leading the development of the code has requested funding from FPT governments to support the creation of an office, which would provide training, education, dispute resolution services, and oversight for the code.

At their July 2023 annual conference, FPT ministers of agriculture recognized the steps taken towards implementation and remained open to discussing how governments can support timely implementation, including through short-term financial support for the creation of an office to improve transparency. R3 - After years of work, broad consultations, and unprecedented engagement across the grocery supply chain, we’re disappointed to see that the Grocery Sector Code of Conduct has still not been launched and that supply chain partners are hesitant to move forward.
At a time when Canadian families are struggling with the cost of food, we need the major grocers and all supply chain partners to adopt and adhere to the Code. The Code is a tangible way to bring more fairness, transparency and stability to our grocery sector and supply chain.
In the coming days, we will be reviewing all possible options available to us. We encourage all industry partners to quickly commit to signing on to the Grocery Sector Code of Conduct for the benefit of consumers.
 

Why should a grocery sector code of conduct be developed?
Shortages experienced during the COVID-19 pandemic and food price inflation have highlighted strained supply chain relationships, from retailers down to primary producers. In July 2021, Federal, provincial and territorial ministers of agriculture called on industry to lead a collaborative process to develop broad consensus around a concrete proposal to improve transparency, predictability, and respect for the principles of fair dealing.

Continued inflation and media attention has increased interest in implementing a grocery sector code of conduct to improve supply chain relationships. Implementation of a code has been recommended in multiple Standing Committee reports since 2021.

Industry-led efforts to develop a grocery sector code of conduct began in August 2021 and implementation is expected by year’s end.

What has been done to date to develop a grocery code of conduct?
In August 2021, an Industry Steering Committee comprised of key industry leaders was established and has provided regular updates to FPT ministers on the development of a grocery sector code of conduct, most recently in July 2023.

The industry-led process has resulted in unprecedented collaboration and the development of a principles based code with a mechanism for oversight and dispute resolution that will improve predictability, transparency and the principles of fair dealing across the supply chain.

Broad industry consultations were held in May 2023 and the code is being finalized for implementation by year’s end.

FPT ministers are united in calling for the participation of all key players in the industry, including large retailers and suppliers.

• A grocery sector code of conduct will contribute to improving the strength and resilience of Canada’s food supply chain.
• The industry-led process has led to unprecedented collaboration across the grocery supply chain.
• We are disappointed to see that supply chain partners are hesitant to move forward.
• We will be reviewing all possible options available to us.
• We encourage all industry partners to quickly commit to signing on for the benefit of consumers.