Authored by Alison Robertson

It’s been almost four years since the Ontario Fruit & Vegetable Growers’ Association first began raising alarm bells about the practices of large grocery retailers. This included unilaterally imposing additional fees on suppliers, which was in addition to reports from growers of existing marketing fees, extended payment terms, late delivery penalties, truck unloading charges and unilaterally changing the price paid for product after delivery.

This helped, in part, to lead to a process that brought all stakeholders to the table to develop a Grocery Sector Code of Conduct. Several years in development, the voluntary Code passed a milestone earlier this year with the announcement that all major Canadian grocery retailers have agreed to sign on and support it.

For growers, this marks a good first step in what we see as the right direction to provide contractual certainty. The retail sector is very concentrated in Canada, often leaving growers feeling like they have limited options when it comes to marketing their produce. 

In the short term, the perishability of fruits and vegetables makes it almost impossible to pivot from last-minute changes, charges and rejections and for longer-term changes, the search for new buyers can be complex and challenging because of the small number of buyers in the market. 

In simple terms, the Code will make things more transparent so that growers will know what to expect. It includes provisions for fair and ethical dealing, commercial agreements and a variety of other topics such as payment terms, fees and how to handle the process of delisting a product, for example. 

A new Office of the Adjudicator will be set up where both sides will be able to bring disputes for resolution if they can’t reach an agreement on their own – and rules have been added to protect growers against retribution or punitive measures by retailers should they exercise their rights to adjudication.

The Code represents the opportunity for a major culture change in the supplier-customer relationship and it will take some time to evolve and for everyone to understand and become comfortable with the new framework. And there is no doubt that there will be some growing pains as both sides look for interpretation of some of the rules by the Office of the Adjudicator. 

What the Code in its current form does not do is address specific long-held grower concerns, such as providing reimbursement for truck waiting times or dropping various fees. The Office of the Adjudicator will help make rulings in individual cases, but broader spectrum change is not part of the Code at this time. There is ongoing frustration in the grower community about what seems like never-ending increases in retailer fees and buyer and government policy changes that result in higher costs for growers but without a mechanism to recover those costs from the marketplace. 

As retailers struggle to respond to consumer anger about high food prices, we hear from growers that many are being pressured to accept prices that are the same or in some cases even lower than they received in the previous years. 

Unfortunately, this creates an unsustainable environment for growers – and along with higher production costs, there are also other expectations and demands on growers by consumers and government, which all also cost money.

Long term, this imbalance threatens the very future of our domestic fruit and vegetable production. Simply put, growers need to stay profitable to stay in business – and without growers, the rest of our domestic food supply system is at significant risk. 

It’s a risk we can’t afford to take. Recent global events have shown us how precarious it can be to rely on others to feed us and with global weather becoming more volatile and extreme, those other regions may also be dealing with supply challenges. That’s why it is important that all of us in the grocery retail supply chain work together in good faith and while we appreciate the first step the Code represents, there is more work to be done to extend its mandate and offer greater fairness and transparency.