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Grocery inflation in Canada: Documents show government efforts Achi-News

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Grocery inflation in Canada: Documents show government efforts

 Achi-News

Achi news desk-

It was clear to the federal government as early as last fall that Loblaw and Walmart could hold onto the grocery code of conduct, jeopardizing the project’s success.

Documents obtained through access to information legislation shed new light on the federal government’s efforts to convince the two retailers to sign up to the grocer’s code of conduct, with cracks appearing in the months leading up to the House of Commons meeting where it said the grocers who could not. almost complete code signing.

“There are ongoing federal efforts to seek commitment from key players, including major retailers such as Walmart and Loblaws, to participate in the code,” read a briefing note prepared on September 22 for a meeting between federal agriculture and the agri-food minister Lawrence MacAulay and Quebec agriculture and food minister André Lamontagne.

The document, obtained through the Access to Information Act, says the participation of some of the largest retailers – namely Loblaw and Walmart – “is still to be determined.”

The code of conduct is intended to set out agreed rules for negotiations between industry players, including retailers and suppliers. It would also include a dispute resolution process.

It was supposed to be voluntary, but it has always been recognized that all the major players are needed on board to work, Francis Chechile, a spokesman for MacAulay, said in a statement.

Until last fall, the code appeared to be progressing well, Chechile said, noting that federal, provincial and territorial governments have been closely monitoring progress and engaging with stakeholders including Loblaw and Walmart.

“By the end of October, it had become clear that the delay by Loblaw and Walmart was so great that it posed a risk to the successful implementation of a code with the full participation of the industry,” said Chechile.

On December 7, leaders from Loblaw and Walmart told a 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, the chairman of Loblaw, Galen Weston, said that he stood by a letter that the company had sent a month earlier to the committee that develops the code. The letter said Loblaw was concerned the code “could raise food prices for Canadians by more than $1 billion.”

The December 7 committee meeting was a public confirmation of the two grocers’ reluctance to sign the code as drafted, said Michael Graydon, CEO of the Canadian Food, Health and Consumer Products association and leader of the group that has been developing the code. However, he also said there were indications to him around October that this could happen.

As the code came to an end, plans were underway to launch a grocery code adjudicator’s office.

But after Dec. 7 comments from Loblaw and Walmart, progress on the office slowed. Work to hire a referee has been delayed, and a request for money for the office is in limbo, Graydon said.

However, even before signs of the two grocers’ reticence became apparent to Graydon and the federal government in October, officials were working to get the retailers to participate, according to the documents.

Deputy agriculture minister Stefanie Beck, two representatives from Loblaw and three other government officials met on September 22 to discuss a number of issues, mainly sustainable agriculture, according to a briefing note.

But they also planned to talk about the code. The briefing note said government officials should “underline the federal desire that all major retailers commit to the grocery code of conduct.”

“Loblaws has not actively participated in the industry-led process to develop a grocery code of conduct and has been reluctant to publicly affirm support for the code until the industry proposal is complete,” the a note reads.

The federal, provincial and territorial ministers had a call on November 27 to discuss the code and the possibility that the two main retailers would not adopt it, according to a briefing note.

Although the code is supposed to be voluntary, there has recently been talk of making it a law instead to force everyone to participate.

MacAulay has said the government is “actively exploring all federal options,” including legislation.

And in a letter in mid-February, a House of Commons committee urged Loblaw and Walmart to sign on, saying that if they did not, it “would not hesitate to recommend that the federal and provincial governments adopt legislation to make them mandatory.”

Graydon is still hopeful.

“I don’t think it’s dead in the water; I believe there is a very strong desire to try to find a solution,” he said.

The group is looking to see if some of the code’s language could be changed to bring more clarity, or more prescriptiveness, Graydon said — “and there seems to be an openness, at least from one of the retailers, to have those conversations.”

Conversations with Loblaw have given the committee an opportunity to explain aspects of the code and see if a solution can be found, 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 industry process” and is hopeful that a code can be finalized that everyone can support.

Walmart Canada spokeswoman Sarah Kennedy referred The Canadian Press to previous public statements about the code from the retailer, including one from October where the company said it was “aware of adding unnecessary burdens that could increase the cost of food to Canadians.”

A more recent statement from mid-February states that Walmart supports initiatives that promote fairness and reciprocity, and benefit consumers.

“Although we have significant concerns about the code in its current form, we will continue to work constructively with the industry on this subject.”

Supporters of the code have pushed back at claims 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 operation of the non-profit grocery code adjudicator’s office.

A memo to the deputy minister of agriculture digitally signed on June 6, 2023 describes the request for a non-repayable contribution from federal, territorial and provincial governments to support the office for its first two years, “until until its revenue model is implemented and becomes its own. – enough.”

“The majority of the funding is going to come from major retailers and major manufacturers,” Graydon said, although the group has planned for scenarios where not all major players sign on at once.

“Hopefully, it’s the opposite, everyone is in, everyone is early, we get the funding we need, and that we can reduce the requirements in terms of any kind of contribution from the government,” he said.

Chechile confirmed that “officials are awaiting the outcome of industry discussions before taking further action” regarding the funding request.


— With files from researcher Ken Rubin in Ottawa


This report was first published by The Canadian Press on April 26, 2024.

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