Grocery retailers, including Loblaw, Sobeys, Metro, Walmart, and Costco have signed an industry developed Canadian grocery code of conduct. This voluntary agreement is a significant step towards enhancing fairness, transparency, and stability across the grocery supply chain in Canada. The Grocery Code of Conduct is the first of its kind in Canada designed to bring clarity and fairness to the relationship between grocery retailers and suppliers. One of the main objectives is to regulate the various fees and demands that large retailers have placed on suppliers. These retailers are prominent in the Canadian market and hold significant power, giving them the ability to control suppliers and impose contentious fees. The fees have grown to a degree that is causing tension in supply chain relationships.

Setting guidelines for how retailers and suppliers interact would protect smaller and independent grocers who have less bargaining power. For instance, when larger retailers demand extra supply, independent grocers struggle to provide for their community as they are less of a priority and are unable to receive food supply. With many of Canada’s 6,900 independent grocers located in rural and remote communities, unpredictable access to food poses a serious food security issue. In the long term, the code’s benefits will likely promote healthier competition among retailers and support smaller grocers. By establishing fair practices and reducing market power imbalances, the code is expected to foster a more competitive grocery environment.

While the primary focus of the code of conduct is on improving supply chain dynamics, there is some discussion on its impact on grocery prices. Canada’s Grocery Code of Conduct is set to officially take effect on June 1, 2025. In the meantime, strong efforts will be made to ensure that relevant suppliers, independent retailers, and other stakeholders are onboard and informed about the new guidelines.