Walmart, Costco refusing to sign grocery code of conduct 'untenable': industry minister

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Industry Minister François-Philippe Champagne says it’s “untenable” for “smaller players” like Walmart and Costco to delay signing on to the government- and industry-led grocery code of conduct, now that industry giant Loblaw has agreed to do so.

“They will sign on,” Champagne told CTV’s Question Period host Vassy Kapelos in an interview airing Sunday. “I have all faith that they will do that.

After months of negotiations, Loblaw announced this week it's ready to sign the grocery code of conduct, with President and CEO Per Bank telling The Canadian Press a revised version of it is "fair."

“We've put pressure on Loblaw, and you see the outcome,” Champagne said. “Obviously, I don't think it would be tenable for Costco or Walmart to disregard what the will of the Government of Canada is, and Canadian consumers.”

The voluntary code of conduct has been in the works for more than two years, but the federal government pledged to accelerate it in the fall as a way to help stabilize food prices. The code of conduct aims to lay out guidelines for fair dealings between grocery retailers and their suppliers.

While not all of Canada’s five major grocers have signed on, Loblaw predicated its participation on that of others.

When asked whether Champagne is involved in discussions to compel other grocers to sign on, the industry minister said “of course.”

“The pressure is full on, on Walmart and Costco to do the same,” Champagne said, pointing to the federal government’s threats of passing legislation to make the code of conduct mandatory if grocers did not sign on voluntarily.

Champagne is also vowing to “keep the pressure on,” adding he’s been meeting with smaller retailers on an ongoing basis, and that “this is about fairness and transparency.”

He said now that Loblaw is on side, he expects Walmart and Costco to follow suit.

“For me, Loblaw was really the one we need to convince to make sure that all the others would come on board,” he said.

When pressed on the delay, considering the federal government said it would accelerate the code of conduct more than six months ago, Champagne said he believes many retailers were waiting for Loblaw to take the lead.

“I would say when you have Loblaw, which represents 30 per cent of the market in Canada, I will tell you, it seems to me untenable for either Walmart and Costco not to join the code of conduct, because that's what the industry wants,” he said. “It's not just the government, it's not just the consumer, but that's what the industry wants.”

And when pressed further on the threat of legislation, Champagne said it’s an unlikely tool at this point.

“I don't think that's going to happen,” he said. “We've been very clear that if it did not happen, but this was at the time, we needed to push Loblaw, now you're talking about two of the smaller players in the industry.”

Walmart Canada spokeswoman Sarah Kennedy told The Canadian Press this week the company "just received the latest draft of the revised Grocery Code of Conduct, which was not previously shared with us."

"We will review it and determine next steps," she wrote in an emailed statement. "As we've said all along, we continue to be focused on our customers' best interests."

With files from CTV’s Question Period Senior Producer Stephanie Ha