Loblaw’s decision to endorse the proposed Grocery Code of Conduct was more of a case of the Grocery Code accepting Loblaw’s objections, a review of multiple iterations of the draft codes show.

Canada’s largest grocer reversed its position on the code, announcing in mid-May that it would sign the agreement that governs the relationship between suppliers and retailers.

In publicized testimony December 7, 2023, to the House of Commons Standing Committee on Agriculture and Agri-Food, then-president Galen Weston said his firm was not prepared to accept the code at that time, in part because it would result in higher retail prices for consumers.

So what changed?

The proponents of the Code have made many iterations public. A comparison of the November 27, 2023 version (prior to Weston’s testimony), with the June 2024 version shows that rather than Loblaw suddenly accepting the code, the code’s proponents accepted Loblaw’s arguments.

In that committee testimony, Weston re-iterated support for the Code conceptually, but identified four specific areas of concern for his firm.

“The current drafting of the dispute resolution principle in the code gives manufacturers the ability to escalate disputes around cost increases to a yet-to-be-defined third-party mechanism,” He also identified sections 2.5, 3.4 and 4.4 of the code as other specific areas of risk in the code at that time.

A comparison of the November 2023 version of the code and the June 2024 version that won acceptance, shows that the key differences were to the sections Weston highlighted.

Multiple sections about dispute resolution were introduced, rewritten and relocated in the document. Section 4.4 about order processing was substantially changed and moved to the pre-amble. Section 2.5 about how agreements were defined was deleted, and sections 3.4, 3.5 and 3.7 about retailer charges for non-compliance were rewritten or deleted.

Wal-Mart also expressed disagreement with the Code at the same 2023 committee meeting, but President and CEO Gonzalo Gebara was much less specific about its objections.

Wal-Mart agreed to the revised code after Loblaw announced its support. In announcing the agreement, Loblaw representatives identified the dispute resolution process as a critical change to the code that enabled its endorsement.