In the food business, there is likely no more ruthless arena than the grocery store. A recent move by Walmart to impose new costs on suppliers has prompted a group of food and beverage organizations to call on the federal government to step in and regulate the grocery industry.
The Canadian Federation of Agriculture, Dairy Processors Association of Canada, Food and Beverage Canada, Canadian Beverage Association, Canadian Horticulture Council, Baking Association of Canada, and Food and Consumer Products of Canada released a joint statement saying that requiring food and beverage suppliers to cover the cost of investments in retail stores will come at the expense of the farmers’ and processors’ own investments in their Canadian facilities.
“We therefore call on the federal and provincial governments to implement a code of practice in Canada to check this arbitrary conduct from large grocery retailers, review all current fees, penalties, and after sale deductions, and to protect Canada’s agri-food sectors,” the group says.
Walmart announced last week that beginning in mid-September, it will begin charging suppliers 1.25 per cent on the price of products and add a five per cent levy on goods sold online. These fees will go towards the mega company’s five-year, $3.5-billion plan to upgrade its Canadian stores and logistics.
The food and beverage processors call these latest fees “arbitrary” and say these penalties imposed by “large grocery retailers” on Canadian farmers and food and beverage processors negatively impact Canadian consumers, as well.