Ten lobby groups representing food producers and retailers have been in talks with a government-appointed mediator for more than a year, trying to come up with a set of new rules to govern dealings between grocers and their suppliers. Legislators and industry insiders believe a code of conduct is the best way to finally stamp out years of power imbalances and bully tactics in the sector, in which five retail chains control roughly 80 per cent of sales.
In the early days of the pandemic in 2020, Walmart Inc. and Loblaw Companies Ltd. enraged their suppliers by unilaterally implementing new fees that forced food companies to help fund upgrades to the grocers’ e-commerce operations. Suppliers said the fees were a glaring example of how much power a handful of dominant grocery chains wield against food manufacturers and farmers in Canada. They complained of being forced to pay draconian penalties for short or late shipments, at a time when COVID-19 infections were causing widespread shortages and labour issues for manufacturers. And because the grocers represented such a large portion of national sales, suppliers said they couldn’t afford to push back against the fees out of fear the chains might retaliate by “de-listing” their products from shelves.
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