Prices, the government plan becomes a boomerang: “It will make them rise instead of calming down”

TORONTO – The group responsible for the development of the “Food Code of Conduct” – so much desired by the federal government to slow down price increases in supermarkets – says that the launch of the project is being held back by the lack of support from some major food manufacturers, first and foremost Loblaw and Walmart. And the general impression is that the “plan” conceived by the government itself is leaking on all sides. 

“We’re at an impasse,” said Trustee Michael Graydon, delegate of the Food, Health & Consumer Products of Canada Association and chair of the interim “Code” panel. On Wednesday, the group sent a progress report to the ministers concerned. “There are concerns that without the full participation of all major food retailers, implementation of the ‘Code’ would place stakeholders at a competitive disadvantage” the report reads. “We are faced with a lack of consensus and to say this is disappointing would be an understatement” said federal Agriculture Minister Lawrence MacAulay. “We are actively reviewing all available federal options, including legislation” MacAulay added. “I also met my colleague (the federal Minister of Industry, Francois-Philippe Champagne) and his provincial and territorial counterparts. Since key aspects of the ‘Code’ would fall under provincial jurisdiction, we asked them to do the same”.

But why don’t Loblaw and Walmart Canada sign the “Code” agreement? The explanation is simple: the two food giants have expressed concern that the “Code” could, paradoxically, increase costs for Canadian consumers. And the increase would be, according to Loblaw, even more than a billion dollars.

“We remain supportive of the introduction of a possible ‘Code of Conduct,’ but we will not sign one that is not in the best interests of our customers” Loblaw spokeswoman Catherine Thomas said Wednesday. Walmart Canada CEO Gonzalo Gebara also told MPs that the company is not currently in a position to commit to the ‘Code’, due to “provisions that create bureaucracy and costs, costs that will inevitably end on shelf prices” and, therefore, in the pockets of consumers, effectively distorting Walmart’s “low cost” philosophy which therefore expresses “strong reservations” about the latest draft of the ‘Code’, but will continue to provide feedback in the hope that can find a solution.

“We have fulfilled the mandate that they gave us, which was for the industry to develop this ‘Code’ ” said Gary Sands, interim panel member for the ‘Code’ and senior vice-president of the Canadian Federation of Independent Grocers. But the group itself does not have the power to force all major industry players to join, he added. So, “now it is up to governments to find a way to ensure everyone’s participation”. Yes. How?

Pic by Tumisu from Pixabay