What Jan. 1’s New Grocery Code of Conduct Means for Shoppers in Canada

People pay for their items at a grocery store in Toronto, on Nov. 22, 2022. Carlos Osorio/Reuters

Canada’s grocery code of conduct is set to take effect on Jan. 1, a move meant to bring “fairness” to the grocery supply chain. But what will the change mean for shoppers dealing with the ever-rising cost of food?

The Canada grocery code of conduct aims to level the playing field for suppliers and smaller retailers by providing guidelines for fair negotiations.

While one of the code’s architects says Canadians shouldn’t expect an “overnight” change in food prices when it takes effect, here’s a look at what the code is, and its potential impact on shoppers.

What Is the Code?

The Canada grocery code of conduct serves as a voluntary framework designed to promote fair dealings, transparency, and predictability within the grocery supply chain.

The code discourages one-sided agreement changes and establishes regulations to protect smaller suppliers from large penalties or fees levied by larger retailers, according to the code’s website. It also includes an independent dispute resolution system for grocers and suppliers.

More than 120 companies have signed the code, including Canada’s five major retailers: Loblaw, Walmart, Costco, Metro, and Sobeys’ owner Empire. A wide range of large and small suppliers have also signed on, says Food, Health and Consumer Products of Canada CEO Michael Graydon.

“Some companies are still finalizing their participation, but the level of uptake shows there’s real recognition across the sector that the code is needed and worth supporting,” he told The Epoch Times.

What Does it Mean for Shoppers?

The goal of the code is to establish a more reliable system from farm to grocery store, Graydon said, adding that most of the benefits for consumers will occur “behind the scenes.”

“The code is not a price-setting tool, and it won’t suddenly lower grocery bills at the checkout,” he said. “What it can do is support a healthier, more functional supply chain.”

Graydon said the stability and predictability fostered by the code will enable companies, especially smaller suppliers, to compete, innovate, and launch new products in the market more effectively.

“Over time, that supports choice, reliability, and resilience in the grocery system,” he said.

The Jan. 1 implementation of the code will come as the cost of food is expected to rise.

The 2026 edition of Canada’s Food Price Report is forecasting an average family of four in Canada can expect to pay an additional $994.63 for food next year compared to 2025, as overall grocery prices rise by roughly 4 percent to 6 percent.

The Dec. 3 report also predicts meat prices will increase between 5 and 7 percent inflation, while vegetables prices are expected to increase by 3 to 5 percent; baked goods, dairy products, and eggs are projected to see a rise of 2 to 4 percent; fruit prices may increase by 1 to 3 percent, and seafood prices may rise by 1 to 2 percent.

The cost of food has already risen this fall, according to new data from Statistics Canada. Food prices from stores experienced a year-over-year increase of 4.7 percent in November following a rise of 3.4 percent in October, according to the data.

While consumers may not see relief at the grocery store in the immediate future, Graydon said the code will benefit more than food suppliers.

“A more predictable business environment makes Canada a more attractive place for investment, including investment by large multinational food companies,” he said. “That’s good for jobs, manufacturing, and long-term economic strength—all of which ultimately matters to consumers, even if it doesn’t show up as an overnight price change.”

How Does the Code Improve Fairness?

The code is scheduled to be fully operational on Jan. 1, and all components of the code are expected to be completely implemented by the members, according to the Office of the Grocery Sector Code of Conduct (OGSCC).

OGSCC president and adjudicator of the Canada Grocery Code Karen Proud will oversee its implementation and enforcement across the country’s grocery supply chain.

She described the code as an essential component in enhancing collaboration throughout the grocery supply chain.

“By promoting transparency and timely dispute resolution, the Code supports all businesses, from major national grocers and regional independents to primary processors and small-scale suppliers, in building a more predictable and equitable industry,” Proud said in a statement.

The OGSCC said it encourages companies in the grocery sector to attempt to resolve their own disputes before reporting an issue, but the organization will be open for members to submit formal complaints as of Jan. 1.

An annual report will be issued starting in 2026 and is expected to focus on sector trends, systemic challenges, and proposed improvements, according to the code’s website. The reports could also include anonymized case summaries along with suggestions for improvement.

Code Timeline

The grocery code of conduct has been some time in the making.

The process of creating the code began more than three years ago, initiated by a proposal from Food, Health & Consumer Products Of Canada and Empire, supported by Empire’s CEO, Michael Medline.

A 10-person steering committee co-chaired by Graydon and RCC President and CEO Diane Brisebois was established with the responsibility of creating an implementation framework and the Code of Conduct provisions were finalized in November 2022.

The newly formed Office of the Adjudicator for the Grocery Code of Conduct presented the finalized code and governance framework to the federal government and the provinces in late 2023.

Progress on the code appeared to be at risk last fall as it approached its final stages, with some prominent retailers expressing an unwillingness to commit. Leaders from Loblaw and Walmart Canada conveyed to MPs at a House of Commons committee meeting their apprehensions that the code might result in increased retail prices.

A push for the code to be mandatory escalated as a result. The House of Commons committee told Loblaw and Walmart in February that if they chose not to sign on, it would recommend the code be made law—an option that the federal agriculture minister said he was considering.

All of Canada’s major grocers—Empire, Loblaw, Metro, Walmart Canada and Costco—confirmed their support for the voluntary code by July 2024.

Sobeys’ parent company Empire was the first retailer to officially sign on to the code of conduct earlier this year, while dairy product-maker Lactalis Canada was the first supplier member of the code.

Empire owns Safeway, IGA, Farm Boy, Foodland, FreshCo, Thrifty Foods, Longo’s, and Lawtons Drugs.

Official recruitment efforts began this fall after the completion of the code’s final governance documents and Graydon said while not all stores and suppliers have signed on “participation is now broad and growing.”

Membership fees will not be collected until the start of the next year, which means that companies can officially register in 2025 without incurring any expenses for the rest of the year.

The Canadian Press contributed to this report.