Two government deadlines have been missed.
There are people at a grocery store.
The file photo was taken by Graham Hughes.
The government may need to intervene to resolve differences over a national code of conduct for the grocery business as they have failed to do so on their own after a year of trying, according to food industry leaders.
Since last summer, representatives of Canada's biggest retail chains and food brands have been talking about writing new rules that would stamp out power imbalances and abusive tactics in the food supply chain. Negotiating teams say they are at odds on some issues, including which products should be subject to the rules.
A group of executives from 10 trade associations wrote in a report to government this week that they are at a critical juncture. Government assistance may be required to move the process forward.
It would be difficult and time-Consuming to get the government to intervene. The federal government has decided that it doesn't have the power to regulate the grocery industry. Industry advocates fear that scenario would end in disaster and force global food companies and national retail chains to navigate a mess of different provincial regulations.
We acknowledge we are at a critical juncture
The head of one of Canada's largest supermarket chains isn't interested in waiting much longer. The CEO of Empire Co. said late last year that he thought a code could help control inflation. He said it was taking too much time. "Let's go at it."
The semi-annual meeting of federal, provincial and territorial agriculture ministers is one of the major events in the Canadian food business. The trade groups wanted the ministers to set a deadline for November 2022. The industry wants the government to help guide the Code to its conclusion if they don't have it by then.
The industry can still reach an agreement on a code of conduct by November, according to the federal agriculture minister.
During Question Period in the House of Commons, Marie- Claude Bibeau spoke.
The photo was taken by REUTERS.
Bibeau said at a news conference that it was important that the solution came from the industry. We want a solution to this situation, and they know that.
Bibeau and her colleagues have been pushing for change in the grocery industry since 2020, when tensions between grocers and their suppliers increased during the first waves of the Pandemic.
Food producers complain about the fees and fines they have to pay. Up to 40% of a manufacturer's sales can be eaten by those fees, which include late fines and unloading fees.
Grocers raised their fees to another level during the Pandemic.
It is important that the solution come from the industry
Marie-Claude Bibeau
Fees have been charged to suppliers by Walmart and Loblaw Companies. Retailers said the investments would lead to higher sales. Food manufacturers said it was not common for companies to have to pay for capital expenditures. Some chains were accused of charging late fines and penalties for short shipments at a time when many suppliers were dealing with Colovid-19.
A model used in the United Kingdom to rein in bully tactics in the country's concentrated grocery market is believed to be the solution to the problem.
The agriculture ministers appointed a mediation to facilitate talks between the 10 trade associations. The government would step in if the industry couldn't come up with a solution by the end of the year.
The committee of trade associations wouldn't hit its year-end deadline, so the ministers asked for a concrete proposal by March 2021. No proposal came.
Executives from some of the top retailers and food brands were asked to weigh in on the code by the committee. Some of the companies included were Empire and Metro Inc.
The committee said it had reached a consensus on several parts of the code, which is notable in an industry where handshake deals are common.
The committee said it needs to resolve a number of issues, including how the code deals with payments, deductions, fines and fees, and who the rules should apply to.
There's no reason for me to speculate on what will happen if they don't agree They will agree.
The email address is jedmiston@postmedia.
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