Loblaw’s comments on the grocery code of conduct and risks for affordability
Members of a committee working to create a grocery code of conduct are pushing back on Loblaw’s claims that the industry guidelines would increase food prices for consumers and say the major grocer is an industry “outlier” in its concerns.
In a Nov. 13 letter obtained by BNNBloomberg.ca, the industry group working on developing the code responded to a previous correspondence from Loblaw Companies Ltd., in which the company said it could not endorse the code in its current form and expressed concerns that it could “raise food prices for Canadians by more than $1 billion.”
Loblaw’s chief financial officer, Richard Dufresne, had said the grocer cannot endorse the code in its current form.
Responding to Loblaw chief financial officer Richard Dufresne, the working group made up of food and grocery representatives wrote on Monday that the grocer could have raised its concerns earlier in the development process.
Loblaw’s letter does not reflect that it has actively participated in the development of the Code through its representatives to the Retail Council of Canada working group on the Code as well as the comments provided by Loblaw during the stakeholder consultation period,” the Nov. 13 letter reads.
“Loblaw has had the opportunity over the last two years to not only seek to understand but shape the terms of the code.”
The letter gives further insight into internal discussions as the industry guidelines are hashed out.
The working group’s Nov. 13 letter said Loblaw’s views on the code of conduct make the company a clear “outlier” within the broader group of industry stakeholders. It also said that the code of conduct requires “significant compromises” between all stakeholders.
“The fact that the overwhelming majority of large Canadian grocery retailers, independent grocers, suppliers, and agricultural producers support the Code clearly indicates that it reflects a balanced approach,” the letter said.
The letter also took issue with Loblaw’s claim that the grocery code of conduct could raise food prices by over $1 billion is “entirely unsubstantiated, and we believe, inaccurate.” Loblaw previously brought these concerns to the sub-working group for consideration, according to the letter.
“All these concerns have been carefully considered and, in the few cases where they were found to have some merit, resulted in modifications to the code.”
In a statement to BNNBloomberg.ca Tuesday, Catherine Thomas, vice president of communications at Loblaw Companies Limited, said the company still supports an industry code, “but it must work to benefit everyone – particularly customers.”
“We were disappointed in the tone and approach of the meeting and the subsequent letter, and that our very serious concerns were generally dismissed. The code as drafted could add more than $1 billion in costs and run a serious risk of ensuring product availability, ultimately increasing the price of food for Canadians,” she said.
Thomas said Loblaw is “comfortable” that the numbers outlined in its letter are accurate but she declined to explain how the company arrived at the figure of $1 billion in extra costs to consumers.
“We don't think negotiating these points in media is helpful and we are happy to meet with the working group again to discuss further,” she said.
WHAT IS THE GROCERY CODE?
The committee is working to create the code in response to industry calls to address fees that larger grocery retailers were charging suppliers, an issue that rose to public prominence in 2020.
Gary Sands, senior vice president at the Canadian Federation of Independent Grocers and part of the steering committee drafting the code, said in a statement to BNN Bloomberg on Tuesday that the committee is looking to put the code in practice beginning in the spring of 2024.