The imbalance of power that currently exists in Canada makes our grocery supply chain inefficient. Addressing these inefficiencies can reduce waste and lower administrative costs throughout the supply chain which could potentially be passed through to the consumer.
The experiences of the United Kingdom, Ireland and Australia have shown the benefit of introducing grocery codes of conduct.
The implementation of codes have brought balance to supplier-retailer relationships, improved competition in the grocery retail environment, and supported greater collaboration along the supply chain.
A report by the Department for Business, Energy & Industrial Strategy (United Kingdom) concluded:
“Large retailers, most suppliers and other parties in the grocery supply chain reported that the [Grocery Code] has created a more level playing field and it had not limited the ability of the UK’s groceries retailers to compete and provide a good consumer offer.”
The UK Groceries Code Adjudicator (GCA) has also reported that, since 2015, there has been a steady decline in supplier complaints related to unfair business practices from large grocery retailers, such as: delay in payments, claims against suppliers for historic invoicing errors and omissions, fees related to forecasting and promotions, delivery issues, and consumer complaints.
The benefits haven’t just been for those in the grocery supply chain. Consumers have seen benefits, too.
Since the adoption of a mandatory code in 2013, food prices in Ireland and the United Kingdom have decreased significantly; 8.6% United Kingdom and 12.4% Ireland. For comparison, food prices in Canada have increased by 4.4% in the same period (a difference of 13-15%).
How do legislated Grocery Codes work in other countries?
The United Kingdom’s Groceries Code Adjudicator (GCA) provides an example for Canada. With minimal costs and a lean administration, the GCA has provided an uncomplicated solution to complex issues within the United Kingdom’s grocery supply chain.
Quick facts: the UK Groceries Supply Code of Practice
Legislated code, introduced in 2009
Applies to the largest retailers (annual turnover of more than £1 billion)
Oversight provided by the Grocery Code Adjudicator
Quick facts: Grocery Code Adjudicator
Established in 2013
Power to investigate issues, arbitrate disputes, and impose sanctions and other remedies for breaches of the Code
Annual budget is £2 million, wholly funded by a levy on large retailers
Retailers and suppliers report that it has created a greater culture of collaboration and transparency rather than limited the ability to compete or offer more value to consumers
The United Kingdom’s GCA demonstrates that the introduction of a Canadian Grocery Code of Conduct does not have to be complicated. In fact, it could be a small investment with significant benefits.