Thank you, Mr. Chair.
Many farm sectors are facing all sorts of cost pressure increases from energy, labour and fertilizer. We've heard a bit about the fresh market sector and the direct dealings with the retailers. A sector I am most familiar with is the processing sector—so there's another food manufacturer in the middle of the value chain—particularly the processing tomato sector, and I think this will serve as an example for many sectors.
I'm familiar with it in Ontario and in California, which is the global benchmark. California produces 30% of the world's processing tomatoes, 20 times what we do here in Canada. It just set its price to growers at $138 U.S. f.o.b the field, which is about $184 Canadian. California growers are facing cost pressures. In Canada, growers here are facing those very same cost pressures plus the carbon tax yet on top.
My understanding from industry discussions that are happening right now is that Canadian growers won't even achieve the price f.o.b. the plant—where the growers have to deliver to the plant—that California growers are getting in the field. Those are some of the cost pressures that our processors and food manufacturers are facing, besides their increasing costs for packaging, etc. Then these processors will come and meet with our food retailers. Then there are the consumers. What are we going to do for the consumers? What can be done?
The United Kingdom has had experience with a grocer code of conduct—we've heard a bit about it today in testimony already—that has the potential to lower costs to consumers relatively because it lowers the administrative costs for retailers. I have many specific examples I could talk about.
In my discussions with a food manufacturer, he's described his experience with two different retailers as follows. He says that retailer A generally accepts the increase as long as you can back it up. Then they take their margin and let the consumer decide if it's too much or not. This is actually a smart and responsible way of handling inflation. Concerning retailer B, he says that these guys are—and, Mr. Chair, I cannot say the next word because it's unparliamentary—and the worst in the industry. They go after their vendors and not only deduct but add fines unilaterally and have these fancy calculations that they don't share with you. Then they come back and say you owe 1% to 2% of total sales. He says that, if the code of conduct is not implemented as mandatory, and with a governing body, they are done selling to them—they are terrible.
We've had some statements today that retailer practices are transparent. I would invite those retailers to share with this committee and table documents as evidence that back up that statement. I'm not going to identify the manufacturer that I was quoting for fear of reprisals, but here's my question. Given the disparity in behaviour from retailers, would the Canadian consumers benefit from a code of conduct, and would your company participate if other large retailers won't?
Let's start with Mr. Cope.
