A new industry-led grocery code of conduct in Canada has come into force, introducing clear standards for contracts, fee practices and dispute resolution mechanisms between retailers and suppliers operating within the sector. Fully operational as of January 1, 2026, the framework is designed to strengthen transparency, predictability and fairness across commercial relationships in the grocery supply chain.
The voluntary code applies to all grocery retailers and suppliers in the Canadian market for food and household products and seeks to curb unfair practices that have long been a concern in supplier-retailer relations. Under the new rules, parties are discouraged from unilaterally changing contracts or taking retaliatory actions when rights are exercised under the code, and they are encouraged to negotiate clear, written agreements that define payment terms, promotional programs and performance metrics.
Limits are now placed on fees and deductions charged by retailers — such as for promotions, shrinkage or non-compliance — requiring substantiated explanations and opportunities for suppliers to dispute charges before funds are deducted. Retroactive charges are restricted unless expressly agreed to in writing. The code also expects good-faith collaboration on forecasting and ordering, encouraging both sides to work together to manage demand swings.
A central element of the framework is the Dispute Resolution Management Process (DRMP), which requires that disagreements be first addressed internally before being escalated. The DRMP provides an impartial mechanism to escalate unresolved disputes and reach fair outcomes — a key step toward predictable commercial conduct in the grocery sector.
The implementation of this code aims to balance commercial power between larger retailers and suppliers by establishing behavioural expectations and structured processes for contractual clarity and conflict resolution, which industry leaders say will support more stable supply chain relationships.
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