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Loblaw, Walmart tell government grocery code of conduct will raise prices, not lower them

Loblaw’s Galen Weston, top, and Walmart Canada’s Gonzalo Gebara during a parliamentary committee meeting on grocery prices.

Galen Weston, executive director of Loblaw Companies, and Gonzalo Gebara, president and CEO of Walmart Canada, told government officials at a House of Commons agriculture committee meeting that a grocery code of conduct will lead to higher prices for customers not lower them.

Weston told MPs he’s concerned the code will give too much power in negotiations to large multinational manufacturers. Many manufacturers are already “signalling or submitting higher than expected cost increases for next year….”As the code is currently drafted our strong conviction is that it will raise prices…the principle is fine, but the way it’s drafted is what we have an issue with.”

Gebara made similar comments about the code. “We want to make sure the code has all of the different provisions and conditions so that we can conduct our business to offer low prices every day for our customers across Canada,” he said. “We believe that the code is not in a position for us to commit to signing.”

While Loblaw and Walmart are opposed to the code in its current form, other food retailers, including Empire, Metro and grocery independents, support the code. Empire president and CEO Michael Medline spoke to the committee on Monday, stating that while his company is ready to sign the code, “we now have serious doubts as to whether the code will actually come into effect due to recent opposition by some retailers. In no way do we believe, nor does evidence show, that a grocery code of conduct would lead to higher food prices or less choice for Canadians. In fact, quite the opposite.”

Gary Sands, vice president of the Canadian Federation of Independent Grocers (CFIG), and Michael Graydon, CEO of Food, Health and Consumer Products of Canada (FHCP), who chairs the interim board of directors of the steering committee drafting the code, have both stated in recent days that the code would be good for the industry and not increase food prices.

Watch Weston and Gebara at the hearings.

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