Canada’s voluntary Grocery Code of Conduct doesn’t change much

Is Canada’s Grocery Code of Conduct a meaningful response to rising food prices and corporate power in the grocery sector? It promises fairness, transparency, and stability for retailers – supplier relationships, but can it deliver? Its  carefully constructed language can’t hide its fundamental weakness: it is a voluntary framework that avoids confronting the structural forces driving inequality and high prices in Canada’s food system.

The Code went into effect on January 1, 2026 to help suppliers that sell to a dominant grocery chain address sudden fees, opaque contracts, and unilateral decisions. The code claims to  establish expectations for good faith negotiations, clearer agreements, and a process to resolve disputes but for many suppliers, particularly smaller producers, the imbalance of power with large retailers still has had real financial consequences.

Grocery Code of Conduct participation is voluntary, and adherence depends on the corporations’ willingness to regulate their own behaviour. In a sector defined by high concentration and significant market power, this reliance on voluntary compliance is a critical flaw. It assumes that dominant firms will act against their own economic interests without being required to do so. When has this ever been the case?

In Canada’s grocery industry a small number of major players –we all know their names –exert disproportionate control over the supply chain, influencing everything from supplier terms to retail pricing. The imbalance is not incidental; it is systemic. Expecting voluntary guidelines to meaningfully alter this dynamic overlooks the economic incentives that underpin corporate decision-making.

Furthermore, while the Code includes a dispute resolution process, it lacks binding authority, significant penalties, or regulatory oversight capable of enforcing compliance. It does not override existing competition laws, nor does it introduce new legal obligations. As a result, it is not a regulatory instrument but rather a set of best practices. Disputes may be mediated, but structural inequities remain intact.

Perhaps most notably, the Code does not directly address Canadians’ biggest concern: the rising cost of food. Its focus is limited to business-to-business relationships within the supply chain, not the prices consumers ultimately pay. While improving supplier-retailer dynamics may have indirect effects on prices, there is no mechanism within the Code to regulate pricing behaviour or curb excessive profit-taking. It sidesteps the central public concern and only  addresses a narrower set of industry issues.

The problem is not simply one of fairness in contractual relationships, but of market power. Evidence shows a persistent and widening gap between what farmers receive for their products and what consumers pay at the grocery store. Retail prices have increased substantially, while farm-level returns have stagnated, a dynamic driven in large part by corporate concentration and profit extraction across the supply chain. 

The Code does not attempt to address this concentration. It does not impose limits on dominant firms, introduce price oversight, or strengthen competition policy. Instead, it operates within the existing framework, assuming that improved conduct within the current system will produce better outcomes. The Code avoids confronting the underlying drivers of inequality and inflation in the food sector.

Relying on the dominant players to self-regulate underscores the Code’s failure to address power issues. Canada has previously witnessed the shortcomings of this approach, most notably in the bread price-fixing scandal involving major grocery chains. That episode demonstrated that voluntary standards and internal oversight are insufficient to prevent anti-competitive behaviour when strong financial incentives exist. Despite this, the Code places considerable trust in the same actors to uphold its principles.

The Grocery Code of Conduct is not a transformative policy.  At best, it is a lukewarm compromise, and at worst an exercise in political lip service unlikely to substantively affect the factors that led to its creation. It offers surface level incremental improvements in transparency and dispute resolution, but ultimately stops short of imposing the kinds of binding rules necessary to shift behaviour within a concentrated market. By prioritizing industry participation over enforceable regulation, relying on the Code instead of laws and regulations with real teeth reflects our government’s reluctance to challenge corporate power directly.

The Grocery Code of Conduct remains a framework that signals action without delivering. It may ease certain tensions between suppliers and retailers, but it does not alter the balance of power, address the drivers of food price inflation, or hold dominant corporations to account. Without enforcement, without mechanisms to influence pricing, and without measures to tackle market concentration, the Code cannot achieve the fairness claimed to be its purpose.

If Canada is to meaningfully address the issues facing its food system, it will require more than voluntary guidelines and political window dressing. It will require policies that recognize and confront the structural realities of corporate power, that are equipped with the authority to enforce change. Until then, the Grocery Code of Conduct will remain a wholly inadequate response to a much deeper problem.

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Stuart Oke, National Board Representative, Local 318

Share your thoughts about the Grocery Code of Conduct with us: office@nfuontario.ca