Canada’s new Grocery Code of Conduct came into effect on January 1, 2026, aiming to improve relationships between food retailers and suppliers. Governed by the independent Office of the Grocery Sector Code of Conduct (OGSCC), the code establishes guidelines intended to enhance transparency and predictability in these dealings. All five of Canada’s largest grocery chains—Empire, Loblaw, Metro, Walmart Canada, and Costco Canada—have registered under this new framework.
The primary objectives of the code include fostering a “thriving and competitive grocery industry,” promoting trust among stakeholders, enabling informed business decisions, and providing an effective dispute resolution mechanism. The OGSCC plans to administer this mechanism as a last resort, encouraging parties to resolve disputes informally before escalating them to formal adjudication. Each year, the OGSCC will publish a report detailing key trends, challenges, and anonymized case studies related to disputes, without disclosing specific company names.
While public discussions surrounding the code often linked it to efforts to reduce food prices, it does not directly address food price regulation. Nonetheless, there is growing concern among consumers regarding ongoing food price inflation. According to Statistics Canada, food prices rose by 3.4 percent across the country from May 2024 to May 2025, a trend that has persisted throughout 2025.
During a 2023 meeting of the federal Standing Committee on Agriculture, questions arose about the grocery code’s potential impact on food prices. Gonzalo Gebara, CEO of Walmart Canada, and Galen Weston, then president and CEO of Loblaw, faced inquiries about their hesitance to sign onto the code. Liberal MP Heath MacDonald pressed for clarification on how these retailers would address consumer concerns over rising grocery costs.
While the code does not explicitly tie to food prices, some industry leaders have voiced fears that it could lead to price increases. For instance, Weston expressed concerns that the code might inflate prices rather than lower them. The rationale for this perspective lies in the code’s discouragement of certain charges and its stipulation for negotiated payment schedules. If grocers incur additional costs due to these limitations, they may pass these expenses onto consumers, making price reductions unlikely.
Despite initial resistance, Walmart and Loblaw ultimately accepted the code after negotiations. Loblaws’ new president, Per Bank, stated that the company was satisfied with the revised code and no longer believed it would result in higher prices.
While no definitive claims have been made that the code will decrease prices, there are some observations suggesting potential long-term benefits. Experts argue that lower charges to suppliers might foster investment and innovation in the Canadian food processing sector, which could eventually lead to more stable prices. However, these benefits are not explicitly included in the code and may take time to materialize.
The code may also benefit smaller retailers, as it limits the concessions larger grocers can impose on suppliers. This narrowing of disparity could enhance the viability of smaller grocery chains, particularly in underserved areas where limited retail options restrict consumer choice.
Food price inflation in Canada has largely been driven by supply-side factors. From January 1 to December 31, 2025, food prices surged by 4 percent, outpacing general inflation. Major contributors to this increase included significant price hikes in beef (16.8 percent), coffee (30.8 percent), and sugar and confectionery (12.5 percent). These price surges have been linked to the increasing frequency of extreme weather events, which have affected agricultural yields.
Beef cattle herds in Canada have reached their lowest levels in nearly four decades due to drought conditions in both Western Canada and the Midwestern United States. High beef prices have driven consumers to seek alternative protein sources, such as pork and chicken, which have seen smaller price increases. Coffee prices have similarly risen due to weather-related challenges and diseases affecting production regions. Sugar prices have been influenced primarily by tariffs, which Canada implemented in response to similar U.S. protective measures.
Despite considerable inflation, there is some cause for cautious optimism regarding future grocery costs. Analysts anticipate that the rate of food price increases may slow down, and potential price reductions could emerge as beef herds recover and supply chain issues improve. Although these changes are unlikely to be attributed directly to the Grocery Code of Conduct, they could provide welcome relief to consumers facing the pressures of rising grocery bills.
In summary, while the new Grocery Code of Conduct is set to enhance the transparency and fairness of the grocery sector in Canada, it does not serve as a direct mechanism for controlling food prices. Its success will largely depend on the willingness of retailers and suppliers to adapt and collaborate within the new framework.
