All major industry players need to sign on to the grocery code of conduct in order for it to be successful, said Metro Inc. president and CEO Eric La Fl猫che.
La Fl猫che told MPs at a House of Commons agriculture committee meeting on stabilizing food prices that Metro is willing to sign the code as it鈥檚 currently drafted.
鈥淥ur team played a leading role in the development of the code. And we are convinced that the participation of all grocers and suppliers is essential to its success,鈥� he said in French on Monday.
Last week, executives from Walmart Canada and Loblaw Cos. Ltd. told the committee that they can鈥檛 sign the code in its current form because they鈥檙e concerned it will raise prices for consumers.
On Thursday, federal Agriculture Minister Lawrence MacAulay and Quebec Agriculture Minister Andr茅 Lamontagne called on all the major grocers to sign the code.
New researchby the Centre for Future Work suggests profits in the Canadian grocery sector will likely exceed $6 billion this year, setting a new record.
The report by the progressive research institute, released and presented to the committee Monday, found food retailers are now earning more than twice as much profit as they did pre-pandemic.
Citing Statistics Canada data, the report said the net income margin on food and beverage retailing has consistently exceeded three per cent of total revenues since mid-2021, more than double the average margin between 2015 and 2019.
The data shows retailers took advantage of the pandemic and its aftermath to increase their profits, Jim Stanford, economist and director of the Centre for Future Work, argued in a news release.
鈥淎n industry can鈥檛 double its profits, if it is merely passing on higher expenses,鈥� he said.
The major grocers have been under pressure from the government to help stabilize food prices. Earlier this fall, the heads of the five biggest grocery companies were summoned by the government to present their plans.
La Fl猫che told MPs that food inflation has been driven by global market forces, and while prices are stabilizing, he said that can鈥檛 be achieved overnight, and nor can it be the responsibility of grocers.
鈥淢etro stands at the end of a very long supply chain, which continues to experience instability. And we are already facing pressure for cost increases in the new year,鈥� he said.
The company is in a blackout period between Nov. 1 and Feb. 1, meaning it won鈥檛 accept any supplier cost increases, said La Fl猫che. This is a long-standing practice, he added.
La Fl猫che said he met with federal Industry Minister Fran莽ois-Philippe Champagne three months ago, and committed to two things: to 鈥渃ontinue to work to deliver the best value possible,鈥� and to sign the grocery code.
鈥淲e have a commitment to delivering value to our customers and offering the best prices. We鈥檝e always done it and we will keep doing it. And we are doing it even more now in a context of inflation.鈥�
MPs pressed La Fl猫che on what the grocer is doing to stabilize food prices, with Liberal MP Leah Taylor Roy questioning whether the company is doing anything beyond its normal practices.
鈥淲hat you gave us was the norm. And what we were asking for was something out of the norm, something that could help your customers and show Canadians that the grocery chains do care about the struggles that people are having today,鈥� she said, referring to a submission by Metro to the committee regarding its plans to stabilize food prices.
La Fl猫che reiterated that the company is committed to delivering value to its customers.
鈥淲e have taken a lot of measures,鈥� he said.
He also said that while the amount of money Metro makes has increased over the past two years, the company鈥檚 profit margins haven鈥檛.
Executives from Loblaw, Empire and Walmart shared some details of their plans to stabilize prices with the committee last week.
Loblaw chairman Galen Weston said a meeting with Champagne resulted in 鈥渕aterially lower prices鈥� for 35 often-purchased items and categories, such as milk, butter, eggs and chicken.
In previous appearances before the committee, the grocers pushed back against the idea they have unduly profited from inflation.
On Thursday, MacAulay and his provincial and territorial counterparts, along with Champagne, met to discuss the government鈥檚 efforts to stabilize food prices and the grocery code of conduct.
鈥淔ollowing over two years of industry negotiations and missed deadlines, Ministers MacAulay and Champagne are extremely disappointed that some supply chain partners, including two of the five major retailers, have indicated that they will not sign on to the code,鈥� the ministers said in a press release Monday evening.
鈥淭he government of Canada continues to explore all available options and requested that the provinces and territories do so as well.鈥�
Weston told MPs last week that the company is concerned certain provisions in the code will raise grocery prices for Canadians as it gives too much negotiating power to large multinational manufacturers.
He said the grocer will sign the code, but not in its current form.
Walmart Canada CEO Gonzalo Gebara told MPs the company is 鈥渘ot in a position at this time to commit鈥� to the code. He said the current version includes provisions that 鈥渃reate bureaucracy and cost, cost that will inevitably end up on shelf prices.鈥�
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