Support is good news for small businesses in the grocery supply chain
Owners of small businesses in Canada’s grocery industry should be among the beneficiaries of Loblaw’s decision to support a new code of conduct.
The country’s largest retailer has widespread influence across grocery, pharmacy, and financial services, and its backing of the voluntary Grocery Code of Conduct may avoid new legislation to address high prices. Consumers have focused on Loblaw and Walmart Canada in criticising the rate of food inflation.
"It is welcome news that Loblaw has agreed to participate in the Grocery Code of Conduct," said Michael Graydon, Chair of the Interim Board for the Code of Conduct. "Within a very complex food system, the vision for the Code has always been based on a fully inclusive, voluntary Code, developed by the grocery industry and managed by its stakeholders across the supply chain. We are one step closer to the implementation of the Code as we continue to work with all industry partners to ensure we have maximum participation by all stakeholders."
The aim of the code of conduct is to make the industry more transparent and ensure fair treatment for suppliers and consumers.
Gary Sands, senior vice-president at the Canadian Federation of Independent Grocers told CBC Radio's Bizdigest that Loblaw’s participation is a milestone, but other major grocers and suppliers must also sign up for it to proceed.
"We are optimistic … adapting certain principles in the industry will have a positive impact on costs and prices," he said.
Loblaw’s decision to back the code follows six months of negotiations with the Code Interim Board and Working Group.
"We have worked intensively and collaboratively with industry groups so that the Code is clearly drafted and fair for all industry participants," said Per Bank, President and CEO, Loblaw Companies Limited. "We believe in the value of a code of conduct for the industry and are happy with the progress made. The Code now requires the participation of all major retailers and suppliers to help bring in a new era for Canada's grocery industry, enhancing the relationship between retailers and suppliers, who both exist to best serve customers."
