This collective commitment by all major players is vital for the code’s effectiveness and represents a significant effort that has taken years to achieve.

The Grocer Code of Conduct is designed to improve competition in the Canadian market by ensuring accountability across the food industry. It targets previously hidden practices, such as the high fees retailers charge suppliers, subjecting them to scrutiny and regulation.

For instance, consider a Canadian jam producer who wants to distribute products through major retailers such as Loblaw. Initially, the grocer might impose listing fees and other charges that could amount to more than $100,000 annually. As the product gains popularity, these fees can escalate dramatically, compelling the supplier to increase prices to maintain profitability.

This cycle leads to market instability and higher costs for consumers. The Grocer Code of Conduct aims to regulate these fee escalations, promoting a more stable pricing environment and fairer practices.

Furthermore, the Grocer Code of Conduct promises a more equitable environment for independent grocers, allowing them to negotiate on more equal terms.

While major players such as Loblaw and Walmart will still hold significant market influence, the code is expected to curb their predatory practices.

The industry’s need for an image overhaul cannot be overstated, especially in the wake of scandals such as the bread price-fixing debacle and the controversy over “hero pay” during the pandemic. These incidents have severely tarnished the public’s perception of the grocery sector.

Key figures such as Michael Medline, chief executive officer of Sobeys, have played pivotal roles in advancing the code. Medline’s call for greater discipline and respect within the industry, alongside the tireless advocacy by Michael Graydon and Sylvie Cloutier on behalf of Canadian food manufacturers, has significantly shaped the discourse and mobilized support among policymakers.

The efforts of François-Philippe Champagne, minister of innovation, science and industry, and the House of Commons agriculture committee chaired by MP Kody Blois, have also been instrumental in positioning the code as a strategic blueprint for fostering competition and enhancing supplier relations in Canada.

With the code’s implementation, food manufacturers and independent grocers will gain a stronger voice, leading to greater product diversity for consumers. This is a straightforward equation: more suppliers equate to more choices on the shelves.

While securing the commitment of all five major retailers is a commendable achievement, the real challenge lies ahead in ensuring compliance and tangible results.

Canadians’ skepticism will likely persist until they witness the benefits of these reforms firsthand — a sentiment that is both understandable and justified.

Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

Canada is home to numerous oligopolies that dominate various industries. For example, five major players in the grocery sector control nearly 80 percent of the food retail market.

While some oligopolies function more effectively, their success depends on the companies behaving ethically, which is precisely the issue plaguing the grocery sector in Canada.

Loblaw, Empire/Sobeys, and Metro hold the reins as dominant grocers in the market. Although these companies are well-managed, the Competition Bureau’s recent report highlights some of their practices aimed at maintaining market dominance.

One notable aspect of the report is the endorsement of the Grocer Code of Conduct. While the code itself is not directly related to the bureau, it significantly contributes to enhancing competition. By providing a platform to address supply chain disputes, the code serves as a necessary disciplinary measure against grocers who abuse their market power, granting food manufacturers more influence.

Consequently, independent grocers gain access to more products and increased protection. Ultimately, the code offers consumers more choices and potentially more stable retail prices, making it a positive development worth applauding.

Additionally, the report emphasizes the need for all levels of government to participate in making the food market in Canada more competitive. This point cannot be stressed enough. Many consumers are unaware of how territorial grocers can be when expanding into small cities and towns.

They may acquire plots of land to prevent competitors from opening stores nearby, and shopping mall leases may include terms that restrict the operation of other food retail outlets. While seemingly insignificant to city councils and mall managers, these measures can have a considerable impact on market prices.

In contrast to the United States, where the intricacies of mergers, acquisitions and their effects on consumers are closely scrutinized, Canada lacks a similar level of attention to such matters.

The report suggests that Canada should tackle interprovincial barriers to attract external players like Aldi and Lidl, two German-based grocers already operating in the United States.

Entering the U.S. is easier. Greater opportunities, less bureaucracy and a more flexible fiscal regime in the U.S. contribute to this favourable environment.

However, the most significant aspect is America’s clear understanding of competition as a concept, with a commitment to eliminating monopolies and oligopolies. Americans view competition as an essential aspect of the market and are vehemently and philosophically opposed to excessive consolidation.

In Canada, too much competition can become an issue. We have grown accustomed to marketing mechanisms such as supply management, for example, at least until prices become a problem for consumers. At that point, we expect the government to intervene. This conflicting attitude toward competition poses one of the greatest challenges for the Competition Bureau.

Yet when it comes to the grocery sector, the Competition Bureau must take action. The food industry is grappling with a problem of a price-fixing culture, which erodes consumer trust.

These revelations make Canada a less attractive place to invest. Executives at Aldi and Lidl can read the headlines. Instead of granting immunity to executives or waiting for companies to confess, it is time to investigate and pursue legal action against companies that choose to violate the law.

In the U.S., engaging in collusion can result in imprisonment.

It’s that simple.

Sylvain Charlebois is senior director of the Agri-food Analytics Lab and a professor in food distribution and policy at Dalhousie University. This op ed first appeared on the Troy Media website. It has been edited for length.