Agriculture Committee on March 27th, 2023

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Mr. Gebara, for being here. I appreciate this.

A previous Walmart Canada president said that he feels “There’s healthy competition in the market.” We're hearing there may be competition between a few companies in the market, but just five grocers sell over 80% of all the food we eat in Canada. Those are Loblaws, Sobeys, Metro, Walmart and Costco. We've heard from most of them, so we appreciate your time and your being here today.

You have a relationship with your customers, but you also have a relationship with suppliers. These are Canadian companies and farmers. What we're hearing from questions and what we're hearing from constituents is this pattern of squeezing suppliers. You're charging more and more fees that make those suppliers and food manufacturers' lives difficult just because of the size that you have, and those fees and charges seem to continue to multiply. If squeezing Canadian suppliers is one way that you're saving your company money, those very suppliers are the same Canadians who may shop at your stores, and this becomes a fairness issue now.

You've said that your fees to suppliers are planned, but in my opinion, that doesn't make it right so I wanted to clear things up.

Does Walmart fine deliveries that do not make appointments on time?

[Gonzalo Gebara]

On the point of competition, I believe that there is very strong competition in the Canadian market. I've been in different markets, and I think it's a highly competitive market—

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

In the interest of time, I'll skip that.

Do you know that you fine deliveries that don't make appointments on time?

[Gonzalo Gebara]

We have different conditions in which we.... We'd prefer not to charge, of course. We'd prefer that every one of our suppliers delivered their commitments in the way they were committed. We have different charges, because operating in such conditions is troublesome for the whole supply chain network.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Would you credit companies if the delivery is waiting to be unloaded? Sometimes they're waiting for hours. That seems to go both ways.

[Gonzalo Gebara]

Yes, but we don't credit the companies.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Do you charge suppliers a listing fee to get their products on your shelves?

[Gonzalo Gebara]

No. As I've said, we conduct our business in a very transparent way, and most of the charges that we have are related to operational costs.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I think we heard testimony today that you've added a service fee to deliveries in order to pay for store expansions and new distribution centres.

Can you explain why suppliers are being forced to pay this fee for you to build new facilities? I'm not sure I understood your explanation well enough.

[Gonzalo Gebara]

What was defined in the past was that we were projecting high growth based on our investment—as I've said—of $3.5 billion to grow our business and our supply partners' business. That invitation was related to that growth opportunity.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

In the beginning of March, we heard the CEOs of Canada's three largest grocery chains—Empire, Loblaws and Metro—all explain that they're participating in the creation of a code of conduct. Again, the previous Walmart Canada president said he would not support a grocery code of conduct.

I'm not sure we've heard that you've changed your mind yet, but to what extent are you participating in those developments of a code? Are you at the table? You said you've just received information, but are you willing to go to the table?

With your experience in the industry, what provisions would be imperative to have you be included or to have you reject such a code?

[Gonzalo Gebara]

As you very well said, we just recently got a first draft of that code. We are starting to actively engage in discussions around the code. I acknowledge that in the past, we didn't participate, but we are willing to participate now.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Okay. I thank you for that information.

Thank you, Chair.

[The Vice-Chair, Conservative, John Barlow]

Thank you very much, Mr. Louis.

Thank you to our witness.

Mr. Gebara, you did commit to table a couple of things with the committee. One was the comparison of transportation costs between Canada and the United States, and there was also your mandate on data collection. That's just a reminder to table that information with the committee when you have it.

I have one quick question, Mr. Gebara. Did Walmart participate in the code of conduct negotiations in process in the U.K., for example?

[Gonzalo Gebara]

I am not familiar with that. My understanding is yes, but I'll have to confirm that.

[The Vice-Chair, Conservative, John Barlow]

Thanks very much, everybody. We will suspend this meeting for a couple of minutes. Then we will be coming back in camera.

Thank you, Mr. Gebara, for taking the time to appear at committee today. We certainly appreciate your comments and the information you've provided us.

We'll reconvene in about five minutes.

[Proceedings continue in camera]