RETAIL giants Walmart and Costco have agreed the terms of a new supermarket code of conduct.
The mega-companies have joined a host of other large retailers who have banded together to keep food prices low.
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“After years of work and broad industry participation, we are pleased to announce that all major retailers have agreed to adhere to the Food Sector Code of Conduct,” Agriculture and Agri-Food Canada announced on Thursday.
“These include Loblaw, Sobeys and Metro and, most recently, Walmart and Costco.”
The code will be officially promulgated next summer.
The aim of the code of conduct is to keep food prices low.
Fair negotiations between suppliers and retailers have been created to provide a level playing field with smaller independent grocers.
The code of conduct has been discussed for years and comes after tensions between retailers and suppliers increased.
Walmart and Costco’s adherence to the code of conduct is a step toward fairness, transparency and predictability for Canada’s food supply chain and consumers, the federal government said.
Retail giants joined the code of conduct just in time for food prices in Canada to remain high.
Suppliers recently warned grocers to expect price increases of up to 40% this summer and fall.
Walmart and Costco’s decision to adhere to the code of conduct will provide more stability for independent grocers, said Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers.
“When big players make demands on suppliers for extra supply, this has been a problem for independent traders,” Sands said.
“They tend to get a little bit left out. So the code addresses that.”
University of Guelph food economist Mike von Massow believes the code of conduct will help the supply chain but will not impact prices.
“Most of us won’t notice this in everyday life,” von Massow said.
The CEO of supplier industry group Food, Health & Consumer Products of Canada says the code will also provide financial stability for food suppliers.
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Michael Graydon, CEO of Food and Consumer Products Canada, expects the code to follow in the footsteps of the UK code.
“The UK code has been incredibly successful and is based on the same principles as Canada,” Graydon said.
“I’m hopeful the same results will happen.”
Loblaw Companies Ltd. originally followed the supermarket code of conduct.
The company previously estimated that implementation of the code could lead to a billion-dollar increase in food costs.
In May, the company reversed course and announced that it would support the guidelines and demonstrated full support for the code.
The code of conduct is expected to come into force in June 2025.
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