The chief executive of Sobeys has waded into the debate over moves by some of the Canadian grocer’s rivals to hike fees charged to manufacturers.
Michael Medline said Sobeys will not follow moves by Walmart and by Metro Inc to increase fees, labelling the moves “hard to believe and repugnant”.
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“This is the worst relationship I’ve ever seen in my couple of decades in retail,” Medline said at an online event, according to The Canadian Press. “I don’t think it’s healthy … some of these behaviours are just plain bad for Canada.” just-food has approached Sobeys to confirm Medline’s comments.
In late July, the local arm of US supermarket giant Walmart advised suppliers it was increasing the fees it charges to sell their products, both in stores and online.
United Grocers Inc., a group representing major grocers including Metro Inc. and Alimentation Couche-Tard, then told suppliers it expects the same terms as its competitors.
The moves re-invigorated calls for the supermarkets’ power to be checked and, in response, food organisations in Canada joined forces with beverage industry bodies and farming groups to call on the country’s government to take action.
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By GlobalDataThe response supplier organisations most desire is the establishment of a grocery code of conduct overseen by an adjudicator, of the type that exists in countries such as the UK and Australia, to maintain a fair pricing and fee structure that suits all parties.
Medline told the Empire Club of Canada event he is open to a code of conduct if it were fair and applied to all grocers and suppliers, The Canadian Press reported. “It has to cut both ways,” he said. “Suppliers need to also promise to play fair.”
He added: “This is the worst relationship I’ve ever seen in my couple of decades in retail. I don’t think it’s healthy … some of these behaviours are just plain bad for Canada.”
just-food analysis from September 2020: Can Canadian grocers and suppliers reach detente?
