Loblaw finally agrees to sign grocery code of conduct following lengthy negotiations.

TORONTO - Loblaw Cos. Ltd. has announced its readiness to commit to the grocery code of conduct, bringing years of negotiations to a potential resolution.

After six months of discussions, Loblaw's president and CEO Per Bank stated that the retailer is prepared to sign the code, with the condition that other industry players also participate. In an interview, he emphasized that the revised code is fair and will not result in higher prices for consumers. The development of the code involved collaboration among key leaders in the food industry, aiming to level the playing field for suppliers and smaller retailers.

Last December, Loblaw and Walmart Canada initially declined to sign the voluntary code, citing concerns about potential price increases for customers. Nick Henn, Loblaw's chief legal officer, explained that while the core principles of the code remained unchanged, efforts were made to enhance clarity in the document. Specifically, improvements were made to address issues such as the dispute resolution process, ensuring that there is clear guidance on when matters should be escalated to an adjudicator.

With these modifications, Loblaw is now more confident that the code will not lead to price hikes. The target implementation date for the code is set for June 1, 2025. Michael Graydon, CEO of the Food, Health & Consumer Products of Canada association and chairman of the interim board for the code, expressed satisfaction with Loblaw's decision to join the initiative.

He highlighted the importance of establishing the office of the grocery code promptly to facilitate ongoing work. While most major grocers have signed on, efforts are still underway to bring remaining stakeholders on board, such as Walmart and Costco. Following Loblaw's commitment, industry responses varied.

Walmart Canada indicated that they are reviewing the latest draft of the code before determining their next steps, emphasizing their focus on customer interests. Empire welcomed Loblaw's endorsement of the code, recognizing the importance of industry collaboration while maintaining competitiveness. Metro Inc.

reiterated its support for the code, stressing the necessity of all grocers and suppliers participating for its success. Gary Sands, a member of the code's interim board, expressed enthusiasm over Loblaw's participation, describing it as a significant milestone. As momentum builds for the code, calls for making it mandatory have intensified in recent months.

The House of Commons committee examining food prices warned Loblaw and Walmart that if they did not voluntarily agree to the code, legislation could be proposed. Amid growing pressure and consumer activism, Loblaw faced criticism for its perceived role in rising food prices in Canada. A Reddit-organized boycott targeted Loblaw-owned stores, demanding the company's adherence to the grocery code of conduct.

While Bank clarified that the decision to sign the code preceded the boycott, he acknowledged meeting with the boycott organizer and expressed confidence in her approval of Loblaw's commitment. Although external factors like global events have contributed to food inflation, Loblaw has emerged as a focal point for public scrutiny. In response to the backlash, Loblaw's leadership defended the company at its annual meeting, attributing the criticism to its prominent position in the industry.

As discussions on the grocery code progress, the industry looks ahead to enhanced collaboration and fair practices for all stakeholders.