Costco open to grocery code of conduct, but says it must apply to all

A Costco executive says the retailer is open to supporting Canada’s long-planned grocery code of conduct, but it does not have enough details to make a decision yet.

The grocery code of conduct, which has been in development since 2021, is at an impasse as both Loblaw and Walmart have so far refused to sign on to it in its current state.

Pierre Riel, executive vice-president and chief operating officer of Costco Wholesale International and Canada, said the company itself has not been invited to participate directly in the code discussions but is involved through the Retail Council of Canada (RCC). The RCC is a non-profit association that represents retailers including Canadian grocers.

“This code of conduct is not an issue for us,” Riel told MPs at a meeting of the standing committee on agriculture and agri-food Tuesday.

“We look forward to reviewing the details of how the code will function day to day, who will participate, how disputes will be resolved and, in the end, how the code will impact food prices.”

However, at the moment, Riel said Costco does not have enough information to be able to say whether it will agree to the code or not. He added that the retailer is waiting on any updates from the RCC on this matter.

“It would be premature to say today that we will participate when we don’t have all the details defined,” he said.

0:56 Costco executive tells MPs it has not sought to increase profits amid inflation

Riel stressed that the code should apply to the entire industry.

“I think you need everybody to participate and all of us should look at it as beneficial for the consumer.”

Similar sentiments were shared last week when the committee was told that Canada’s long-planned grocery code of conduct requires participation across the board. 

“The code will not work without the mandatory participation of all the players in the industry,” said Sylvain Charlebois, food researcher and Dalhousie University Agri-Food Analytics Lab director.

“I can’t see this code working without Loblaw and Walmart,” Charlebois told MPs.

0:40 Loblaw head Galen Weston says grocery code of conduct would raise food prices

In December 2023, Loblaw chair Galen G. Weston and Walmart Canada CEO Gonzalo Gebara said they weren’t open to signing the code in its current form, saying it would drive up costs.

Weston said Loblaw estimates the code will add $1 billion in costs to the supply line, which will be passed along to consumers.

Gebara did not give MPs a value estimate like Weston but said added bureaucracy will increase costs that have to be passed to consumers.

According to Statistics Canada data released in January, grocery food prices rose 4.7 per cent year over year in December, the same pace reported the previous month.

— with files from Global News’ David Baxter