Already last fall it was clear to the federal government that Loblaw and Walmart could oppose the supermarket code of conduct, jeopardizing the project’s success.
Documents obtained through freedom of information legislation shed new light on the federal government’s efforts to convince the two retailers to sign the supermarket code of conduct, with cracks appearing in the months before a meeting of the House of Commons where the shopkeepers said they couldn’t. sign the almost complete code.
“There are ongoing federal efforts to seek commitment from key players, including large retailers such as Walmart and Loblaws, to participate in the code,” reads a briefing note prepared on September 22 for a meeting between the federal minister of agriculture and agri-food, Lawrence MacAulay. and the Minister of Agriculture and Food of Quebec, André Lamontagne.
The document, obtained through the Freedom of Information Act, says the involvement of some of the largest retailers, namely Loblaw and Walmart, “is still to be determined.”
The code of conduct aims to establish agreed rules for negotiations between industry players, including retailers and suppliers. It would also include a dispute resolution process.
It was intended to be voluntary, but it has always been recognized that it needs all major players involved to work, MacAulay spokesman Francis Chechile said in a statement.
Until last fall, the code appeared to be progressing well, Chechile said, noting that federal, provincial and territorial governments had been closely monitoring progress and collaborating with stakeholders, including Loblaw and Walmart.
“By the end of October, it became clear that Loblaw and Walmart’s misgivings were such that they posed a risk to the successful implementation of a code with full industry participation,” Chechile said.
On Dec. 7, leaders from Loblaw and Walmart told the House of Commons committee studying food prices that they could not commit to signing the code in its current form, citing concerns that it would raise prices.
At the meeting, Loblaw President Galen Weston said he supported a letter the company had sent a month earlier to the committee developing the code. The letter said Loblaw was concerned the code could “increase food prices for Canadians by more than $1 billion.”
The committee’s Dec. 7 meeting served as public confirmation of the two grocers’ unwillingness to sign the code as written, said Michael Graydon, executive director of the Food, Health and Consumer Products Association of Canada and leader of the group that has been developing the code. However, he also said that around October there were signs that this could happen.
As the code neared completion, plans were underway to launch a grocery code adjudication office.
But after the Dec. 7 comments from Loblaw and Walmart, progress in the office stalled. Work to hire a judge is on hold and a funding request for the office is in limbo, Graydon said.
But even before signs of the two grocers’ reluctance became apparent to Graydon and the federal government in October, officials were working to get the retailers on board, documents show.
Deputy Agriculture Minister Stefanie Beck, two Loblaw representatives and three other government officials met on September 22 to discuss various topics, primarily sustainable agriculture, according to a briefing note.
But they also planned to talk about the code. The briefing note said government officials should “underscore the federal desire for all large retailers to commit to the supermarket code of conduct.”
“Loblaws has not taken an active role in the industry-led process to develop a grocery code of conduct and has been reluctant to publicly confirm support for the code until the industry proposal is finalized,” the statement reads. note.
Federal, provincial and territorial ministers were called on Nov. 27 to discuss the code and the possibility of the two major retailers not adopting it, according to a briefing note.
Although the code is intended to be voluntary, there has recently been talk of turning it into law to force everyone to participate.
MacAulay has said the government is “actively examining all federal options,” including legislation.
And in a mid-February letter, the House of Commons committee urged Loblaw and Walmart to sign, saying that if they did not, it “would not hesitate to recommend that the federal and provincial governments adopt legislation to make it mandatory.”
Graydon still has hope.
“I don’t think he’s dead in the water; “I think there is a really strong desire to try to find a solution,” he stated.
The group is looking at whether some of the language in the code could be changed to provide more clarity or more prescriptiveness, Graydon said, “and there seems to be an openness, at least on the part of one of the retailers, to have those conversations.”
Discussions with Loblaw have given the committee a chance to explain aspects of the code and see if a solution can be reached, he said.
“My sense is that they are legitimate in their approach to trying to find a solution.”
Loblaw spokeswoman Catherine Thomas said in an email that the company is an “active participant in the ongoing industrial process” and is optimistic about finalizing code that everyone can support.
Walmart Canada spokesperson Sarah Kennedy referred The Canadian Press to previous public statements about the retailer’s code, including one from October in which the company said it is “aware of adding unnecessary loads that could increase the cost of food for Canadians.”
A more recent statement from mid-February states that Walmart supports initiatives that promote fairness and reciprocity and benefit consumers.
“While we have significant concerns about the code in its current form, we will continue to work constructively with the industry on this issue.”
Proponents of the code have rejected claims that it could lead to higher retail prices.
The documents also show that the industry steering committee requested about $1.8 million in government funding to support the nonprofit grocery code adjudication office’s implementation.
A memo to the Deputy Minister of Agriculture signed digitally on June 6, 2023 outlines the request for a non-refundable contribution from the federal, territorial and provincial governments to support the office during its first two years, “until its revenue model is implement and become autonomous.” -enough.”
“Most of the funding will come from large retailers and large manufacturers,” Graydon said, although the group has planned for scenarios where not all major players sign up right away.
“Hopefully it will be the opposite, everyone will participate, everyone will arrive early, we will get the funding we need and we will be able to reduce the requirements regarding any type of government contribution,” he said.
Chechile confirmed that “officials are awaiting the outcome of industry discussions before taking additional steps” related to the funding request.
– With files from researcher Ken Rubin in Ottawa
This report by The Canadian Press was first published April 26, 2024.