The Government of Canada has announced that Costco and Walmart have agreed to the National Grocery Code of Conduct.  The objective of the Code is to establish transparency and equity in the grocery supply chain extending from farmers and manufacturers to consumers.

The Grocery Code of Conduct was developed in response to conflicts between producers and major retailers with the size of their collective presence representing an oligopoly.  Major issues of concern were the fees imposed by retailers to shelve products together with coercion over pricing.  The Code of Conduct imposes fair and ethical dealing and dispute resolution.

According to Dr. Mike Von Massow at the University of Guelph, “Setting guidelines for how retailers and suppliers interact should help protect farmers and also small chains that lack buying power.”  He added “It’s going to be a more level playing field, but my guess is it’s not going to be a perfectly level playing field.”  Michael Graydon, CEO of Food and Consumer Products of Canada, noted that the Code “Will mean a new era of friendlier relations between grocers and suppliers”.

Loblaw Companies a major grocery chain, initially declined to subscribe to the Code of Conduct but following consumer complaints, assented claiming “Support of the Code is part of Loblaw’s continued commitment to promote a fair and transparent grocery industry in Canada.”  The company maintained that the Code would increase food costs.  The Canadian Code follows a similar initiative that has proven successful in the U.K. Experience in that Nation suggests that their Code of Conduct has resulted in a reduction in retail prices.