Canada is one step closer to creating a Grocery Store Code of Conduct in an effort to level the playing field for both manufacturers and grocery stores.
The country’s agriculture ministers, along with industry leaders, met on Friday to discuss the final details of the plan, which will lead to a fairer and more transparent relationship between retailers and producers.
“What we’re trying to do with this grocery store code of conduct is end the wild west and have a sort of sheriff in town,” said Gary Sands, vice-president of the Canadian Federation of Independent Grocers .
The code will be mandatory and governing rules will apply, something Sands believes will help smaller shops.
“Other, larger retail chains will ask for the whole product or an increase in the product, and if (manufacturers) don’t supply that to that retail chain, there will be a charge or a fine,” he says.
This strategy results in smaller stores left with little or no supply. This is a problem that the government also acknowledges.
“We have several large retailers in the country and we’ve had a lot of complaints from smaller food partners,” said Canada’s federal Agriculture Minister Marie-Claude Bibeau.
These complaints are largely the result of hidden fees imposed by giant companies, one expert said.
“You have to pay hundreds of thousands of dollars to get listed and then you have to buy shelf space and other fees, but these other fees just keep coming out of the blue all the time,” says Sylvain Charlebois, director of the Agri-Laboratory for food and analytics at Dalhousie University.
He says the unexpected costs have even put off some suppliers.
“Refiners just didn’t want to invest in Canada at all, which limited the number of companies and the competition that would have led to lower prices,” says Charlebois.
He believes the implementation of the code will lead to more suppliers looking to distribute in Canada. That could be good news for consumers, as more competition usually leads to slightly lower prices, Charlebois says.
He says the biggest gain would be for smaller businesses to see a level playing field.
The government is now working on setting up a governing body to monitor the rules and impose fines when necessary.
Australia and the United Kingdom have imposed similar codes, and with all of Canada’s agriculture ministers on board, Canada is one step closer to joining that list.
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