Frequently asked questions
+ Why does Canada need a Grocery Supply Code of Practice?
Just five companies control more than 80% of grocery sales in Canada, and some have used their position to treat suppliers unfairly - driving up costs and leaving consumers with fewer, less innovative choices at the grocery store.
The consequences have been clear for decades - unfair behaviour in grocery retail hurts Canadian families, jobs, and our economy. The COVID-19 pandemic has shown just how much we rely on a resilient grocery supply chain and what is possible when suppliers and large retailers can collaborate fairly to deliver the food and essential goods Canadians need.
+ What is the Grocery Supply Code of Practice?
FHCP and Empire jointly proposed the first-ever draft Grocery Supply Code of Practice for Canada, and leaders across the grocery supply sector have signalled support. The Code proposed by FHCP and Empire is based on common principles like transparency and predictability and is focused on increasing value, innovation, and choice for Canadians. Learn more here.
+ Do other countries have Grocery Supply Codes of Practice?
Yes. When similar conditions threatened the United Kingdom’s food supply, the country instituted a Groceries Supply Code of Practice that required written supply agreements, prohibited unilateral or retroactive changes to terms, and improved efficiency throughout the supply chain.
The UK’s Code yielded tremendous and - importantly - mutual benefit, earning support from regulators and suppliers alike. A recent government review found the Code improved communication, collaboration, and efficiency while maintaining flexibility in the supply chain. The proportion of suppliers reporting any potential Code breaches in the last 12 months decreased from 79% in 2014 to just 36% in 2020.
+ Don’t retailers and suppliers already have to follow agreed contracts?
No. Written supply agreements are not required, so practices vary widely. The proposed Grocery Supply Code of Practice for Canada would ensure that all large retailers adhere to the same principles and guardrails, ensuring suppliers are treated fairly and strengthening the grocery supply chain Canadians rely on every day.
+ Will the Grocery Supply Code of Practice give the government control over retailers and suppliers?
No. The Code does not force retailers or suppliers into particular relationships, it simply requires that they adhere to clear written agreements and treat each other fairly. The Code provides a common set of rules of engagement, establishes dispute resolution models, and generally promotes collaboration between suppliers and retailers.
+ Will the Grocery Supply Code of Practice burden smaller, independent grocers?
No. The Code does not apply to small grocers, and actually they will benefit from the more fair environment created by the Code which will reduce large retailers’ ability to force suppliers to redirect available products away from independent grocers.
+ How would the Grocery Supply Code of Practice be enforced?
The proposed Grocery Supply Code of Practice would require large retailers to train Code Compliance Officers. By simply making the rules of the road clear and fair, many issues in the supply chain would be resolved. If there are disputes, the Code includes an independent Adjudicator who will have investigation and enforcement authority. Experience in the UK shows that enforcement authority was a key motivator for compliance but that most disputes were resolved with the Code’s transparency requirements and the collaborative approach taken by the UK’s Groceries Code Adjudicator.
+ Will the Grocery Supply Code of Practice increase food prices?
No. In fact, unbalanced relationships between large retailers and their suppliers have contributed for decades to high costs of doing business in Canada and have had ripple effects on consumers.The proposed Code will increase certainty and transparency so that suppliers can confidently invest in innovation, as well as in domestic manufacturing and job creation.
Experience in the UK shows food price inflation actually fell since its Code was implemented in 2009, and food price inflation in Canada is currently higher than in the UK.