Agriculture Committee on Nov. 20th, 2025

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

In some instances, there are some fees that grocery stores, generally speaking, maybe not only Walmart.... What types of fees, other than just buying the product, should producers pay to groceries or grocers?

[Rhonda Maines-Corrado]

Fees are part of a commercial negotiation between two parties, and the nature of the fees is going to vary, depending on a number of factors, including the product and the categories involved.

At Walmart, our fee structure is both designed and implemented in a fair and transparent manner. It is done with reasonable notice and, as I mentioned, is part of the ongoing commercial negotiation, similar to how suppliers have cost increases that enter into the negotiation.

[The Chair, Liberal, Michael Coteau]

Thank you very much.

Monsieur Perron, you have six minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you very much, Mr. Chair.

Thank you to the witnesses for making themselves available. We appreciate their being here. It's always very important to be able to consult everyone. In fact, we had already met with a few grocers, and I suggested that we invite them, because we really wanted to cover all grocers.

Mr. Allsop, I'm going to repeat what my colleague Ms. Dandurand said, but I tip my hat to Empire for having already agreed to sign the code of conduct. It's very important for us that the major chains sign it. You will understand that this is fundamental. If we don't have everyone's participation, it won't work, obviously. So we thank you.

I would like you to tell me, Mr. Allsop, what motivated Empire to sign the code of conduct now, even though the latest negotiations are not quite finalized.

[Rob Allsop]

In my opening statement, I walked back just how long we've been very motivated to bring this to the industry. We feel that this is the way of working that has been embedded in our culture since the beginning, quite frankly. We were happy with the direction of the working group and the path they were on as the code went through its various iterations, and we were quite confident that it was heading in the right direction to come to its formal implementation this January.

We have no reason to hold up the process. We know this—

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Allsop. I'd like to clarify one thing.

We've heard others say that they're waiting for the final documents before signing the code of conduct. They'll sign it, but they're still waiting for those documents. I'd like to know what motivated Empire to sign it right away. Then I'll ask the other retailers why they haven't signed it yet. As you've said, we know it will be satisfactory.

[Rob Allsop]

Absolutely, and that's why we have no concerns about the direction we're going in. We were confident to sign, knowing that our ways of working align with the principles of the code.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you very much, Mr. Allsop.

Ms. Maines‑Corrado, thank you very much for joining us. As you've just heard, Empire has already signed the code of conduct. You say you'll sign it once the final documents are ready. I understand. Today's meeting is being held in public, which makes your commitment official. Something pretty serious would have to happen for you not to sign the code of conduct, since you're committed to the process. I'd like to hear your thoughts on that.

I'd also like to hear about Walmart's involvement in the negotiations regarding the code's implementation. I don't get the feeling that Walmart is participating very actively. Could you give us a little more information on that?

[Rhonda Maines-Corrado]

Walmart has been actively engaged in the industry working group, working collaboratively alongside the other members, including large grocers, in developing the dispute resolution model to ensure that the principles of the code, which are, as you know, high-level and principle-based, come to life and are implemented appropriately through the more process-driven dispute resolution process.

I'm very comfortable that we have had a robust dialogue wherein all parties have been working very positively and collaboratively together. We are at the final draft stage. I see no material issues at this stage and fully anticipate having the DRMP in place for January 1.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you very much. That's reassuring.

I'd like to remind everyone that, during previous processes, two chains, including Walmart, refused to sign the code of conduct. At the time, Walmart was invited to appear before the committee. In the end, you decided to sign the code of conduct. We're happy that you joined us today. Thank you. What I'm hearing is that it's almost official that you'll sign the code of conduct. Thank you. That's reassuring for the industry.

I'd like to turn to Mr. Nenci now.

Thank you for being here in person.

We said before that conducting all these studies gave the committee three opportunities to meet with representatives from the large chains. We've been able to get to know you better and to better understand your relationships with your suppliers. I agree with my colleague opposite that it sounds almost official that Costco will also sign the code of conduct.

What's stopping Costco from signing it now?

[Pietro Nenci]

We've received the last draft, and from what I've seen and heard, Costco is ready to sign the agreement. It will be submitted to the board of directors for approval, and if the board approves it, we'll sign it.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Excellent.

I'd like to share an idea, and see what you think. I'll start with you, Mr. Nenci, because I think you'll be the most open to this.

During our studies, there was talk of creating an oversight body for price fixing. It's important to know what the ratios and profit margins are. I understand how you work, but we learned from other witnesses how other companies work. Profit margins are a lot higher for produce growers and organic producers, for example, so there's a lack of transparency there.

If the government put in place a price monitoring system, one that would obviously protect your confidential information, would you be okay with that?

[Pietro Nenci]

Our business model is different from our competitors'. Costco is a club store. The annual membership fees we charge allow us to offer lower prices. Part of our revenue comes from membership cards. Regarding—

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

What are your thoughts on an oversight body for price fixing? Wouldn't that be to your advantage?

[Pietro Nenci]

Regarding our margins—

[The Chair, Liberal, Michael Coteau]

We've gone past the six minutes. I'm going to stop you guys there. I'm sorry about that.

I'm sorry, Mr. Perron.

Next, we'll go to Mr. Epp for five minutes.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

I'll begin with Mr. Allsop.

First, I will say thank you to Empire for leading, from the retail sector, in pushing for the code initially, or agreeing to the push for the code—I'm not sure what the proper phraseology is there—and again, for your leadership now.

Since July of last year, when there was agreement from all retailers to sign on to the principles, and now, in your annual process of renegotiating for the upcoming season and for the upcoming year, have you changed any practices? You mentioned in your opening testimony that you've reviewed some of the terms and you've clarified them, but from an overall perspective, have you changed your practices in dealing with your vendors?

[Rob Allsop]

Yes, we are continuously assessing, monitoring and reviewing. It's similar to how we all can manage our expenses in life. We're constantly reviewing emerging expenses and changes in the environment and the industry, and we're constantly calibrating.

You asked if anything changed this year, and things change every year, but they were done with fairness and under the principles by which we work with our suppliers, which are also reflected in the code.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Mr. Nenci, I'll ask you the same question.

Have you changed any of your annual cycle with your suppliers?

[Pietro Nenci]

We, in our code of ethics, respect our suppliers. It has been there for decades, since the inception of our company, and we strive to do that. Our buying teams are brought up from within, so they start at the hourly level, and then they get promoted within. That practice of respecting our suppliers and doing the right thing every day with our business community is imperative to our business model.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you.

I have had discussions with vendors, and neither Empire nor Costco has come up as having made a major change, particularly in cyclical timing, in the annual process.

I'm going to go to Walmart. I'll be direct here: I don't want my comments or questions to be construed as my being negative about this code coming to the finish line, because I'm not; it's the opposite. However, I am concerned by reports that some retailers are actually changing the timing of the renegotiation to get out ahead of January 1.

I'm going to ask you to comment not only about changes to the timing but also about actually being far more aggressive this year compared to other years in your asks of vendors as they move. I'll ask, Madam Maines-Corrado, if you could respond on behalf of Walmart.

Has Walmart changed its timing? That is what I have heard, and Walmart is not the only retailer.

[Rhonda Maines-Corrado]

Fairness, transparency and honesty are part of the core values of Walmart. That hasn't changed in the past year, and it will continue on in the future.

I'm not aware that those allegations were directed at Walmart. We've continued to operate, as we did last year and will next year, in the spirit of fairness and transparency.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

My question is more specifically on the timing of an annual renewal process.

[Rhonda Maines-Corrado]

I'm not aware of any specific change to that timing.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Okay.

One of the triggers that really brought this whole issue to the fore was capital investments made by retailers and then the process of pushing them back on the value chain several years ago. Walmart was one of them.

In your opening comments, you referred to a $6.5-billion investment that you're looking at, and I think if that brings lower prices for consumers and greater transparency, we're all in favour of that.

Who's going to pay for that?