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Federal, Quebec ministers say major grocers need to sign code of conduct

Federal and Quebec agriculture and food ministers disappointed that 'supply chain partners are hesitant to move forward'. Grocers say code could lead to price increases, empty shelves
Federal Agriculture Minister Lawrence MacAulay rises during Question Period, Friday, December 1, 2023 in Ottawa. MacAulay and the Quebec agriculture minister are calling on all members of the food industry to sign on to the grocery code of conduct.THE CANADIAN PRESS/Adrian Wyld

The federal and Quebec agriculture and food ministers are calling on all members of the grocery industry supply chain to sign onto a code of conduct.

Federal Minister Lawrence MacAulay and Quebec Minister André Lamontagne said they're disappointed to see the grocery code of conduct has still not been launched after years of work.

They're also disappointed that "supply chain partners are hesitant to move forward" with signing on to the voluntary code, the ministers said in a statement Thursday. 

The ministers didn't name any companies, but Loblaw Cos. Ltd. and Walmart Canada expressed concern in November that the code in its current form could raise food prices for Canadians. 

At a House of Commons agriculture committee meeting in Ottawa on Thursday morning on stabilizing food prices, members of Parliament pressed Walmart Canada CEO Gonzalo Gebara and Loblaw chairman Galen Weston on why their companies have not yet signed the code.

Gebara said the company has participated in the development of the code, but is "not in a position at this time to commit" to it. 

Weston said Loblaw will sign the code, but not in its current form. He urged the committee to look at the details of the code, which he said as drafted could raise prices and cause empty shelves. 

"We've always said that we would sign the code. We just need to sign a code that doesn't increase the risk of higher food prices to Canadians." 

In their statement, MacAulay and Lamontagne said the major grocers and all supply chain partners need to adopt and adhere to the code.

"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," the ministers said. 

Michael Graydon, CEO of the Food, Health & Consumer Products of Canada association and chairman of the interim board of directors of the grocery code of conduct, said Thursday that the code is "fundamentally done." 

He praised the statement from the ministers, calling it "much overdue." 

Graydon, who was co-chair of the steering committee developing the code, said it's not yet clear whether Loblaw, Walmart or Costco will sign the code.

Costco did not immediately respond to a request for comment. 

In November, Graydon pushed back on claims that the code would raise prices for consumers: "We just don't believe that that's true." 

The grocers have also been under pressure from Ottawa to provide plans to stabilize food prices at their stores. The government summoned the heads of Loblaw, Metro, Empire, Walmart Canada and Costco to present their plans earlier this fall. 

Federal Industry Minister François-Philippe Champagne has said those companies' plans included discounts, price freezes and price-matching. 

On Monday, Empire Co. Ltd. CEO Michael Medline said his company, which owns Sobeys, has expanded its annual November-to-January price freeze. 

"We also have meaningful plans and development to help stabilize food prices past January, but will not discuss these publicly as they remained commercially and competitively sensitive until launched in our stores," Medline told the agriculture committee. 

— With files from Nojoud Al Mallees in Ottawa.

This report by The Canadian Press was first published Dec. 7, 2023.
Companies in this story: (TSX:L, TSX:EMP.A,TSX:MRU)
Rosa Saba, The Canadian Press