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Federal, provincial and territorial governments say the grocery industry has until the end of the year to come up with a consensus on a grocery code of conduct.

The directive comes from the Federal-Provincial-Territorial (FPT) agriculture and agri-food ministers, which formed a working group in November 2020 to identify potential measures to safeguard Canada’s food supply chain and ensure the supply of food at affordable price.

According to a press release about the meeting, held July 15, Canada's agriculture ministers are calling on all players in the biofood industry to "agree on a complete, concrete and applicable solution for all. This solution must include the list of good practices and a dispute resolution mechanism in order to make the food chain more efficient by improving the transparency, fairness and predictability of relations between suppliers and retailers."

The news comes after two separate groups proposed codes of conduct for the grocery industry earlier this year.

Agriculture ministers from across the country are now asking the industry to devote the next few months to finding common ground that will benefit all players in the biofood chain. The working group will support the industry in its efforts to achieve this objective. The work of the pan-Canadian committee is not finished: the ministers will review the rest of the work by the end of the year and ensure that it leads to a suitable and acceptable solution for the entire agri-food sector.

Over the past few months, members of the working group have observed that:

  • Concentration in the retail sector allows retailers to use their bargaining power to impose a range of fees on suppliers.
  • Retail fees have increased over time in form and magnitude, and the way in which they are imposed has changed.
  • Lack of predictability and transparency in how fees are collected as well as the limited and often complex remedies for dispute resolution have resulted in general tension in relationships within the supply chain, which can pose a risk to prosperity and its competitiveness.
  • This contributes to the perception of a less attractive investment environment for some food manufacturing companies.
  • This dynamic has other effects on the food supply chain, including adding barriers to market access for small processors and producers, inhibiting innovation and creating particular challenges for independent retailers.

 André Lamontage, Quebec Agriculture Minister who co-chaired the agri-food ministers group, says the industry's proposal, regulated or not, has to be mandatory for all industry players and needs to include a list of acceptable business practices and a mechanism to resolve conflicts between suppliers and retailers.

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Contact Grocery Business’ content manager
Stacey Newman ([email protected])

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