A new framework for retailer-supplier relationships takes full effect January 1, 2026.
Key Takeaways
For years, suppliers selling into Canadian grocery have operated under commercial terms largely dictated by retailers. Contracts could be amended unilaterally, and products could be delisted without notice. Further, fees and charges could appear without clear documentation. The Canada Grocery Code of Conduct changes these dynamics.
The Code came into effect on June 1, 2025, with a transition period through December 31, 2025 for businesses to align their contracts and practices. Full enforcement and the Dispute Resolution Management Process launched on January 1, 2026.
What Does the Code Cover?
The Code applies to suppliers and retailers trading in food categories including bakery, deli, grocery, meat, seafood, and produce. It also covers select non-food categories: HABA (health and beauty aids), household products, paper products, and pet food.
Excluded categories include alcoholic beverages, tobacco, cannabis, pharmaceuticals, and general merchandise.
Who Has Signed On?
The five major Canadian grocery groups have endorsed the Code, and retailer membership sign-ups are underway. The Office of the Grocery Sector Code of Conduct (OGSCC) administers membership, education, and dispute resolution.
This matters for exporters because Code protections apply only when both trading parties are OGSCC members. So suppliers who want access to the dispute resolution process must join.
What Protections Does the Code Provide?
The Code formalizes several protections that were previously subject to negotiation or absent entirely.
Written Agreements: The Code encourages parties to document all commercial terms in writing (Section 2.1). This includes conditions for payments, fees, promotional programs, and dispute resolution.
No Unilateral Contract Changes: Parties may not alter contracts unilaterally (Section 1.3). If a retailer seeks to change terms after agreement, both parties must consent.
Payment Terms: Payments for delivered products must follow agreed terms (Section 3.1). Where no written agreement exists, payment must be made within a reasonable timeframe after the invoice date (Section 3.2).
Substantiated Charges: Charges for programs such as listings, positioning, promotions, marketing, and shrinkage must be substantiated in sufficient detail to allow verification (Section 3.4). Vague charges without documentation are not compliant with the Code.
De-listing Protections: When a retailer intends to de-list a product, Section 4.11 requires reasonable notice including reasons for the decision, an opportunity to discuss the reasons with a representative empowered to make decisions, and good-faith cooperation to manage depletion and supply issues fairly.
Audit Limitations: Audit-based recovery claims are limited to 24 months from the original transaction unless fraud or intentional misrepresentation is involved (Section 3.7).
Confidential Information: Section 4.12 prohibits any party from requiring disclosure or transfer of confidential information or intellectual property beyond what is reasonably necessary to perform under an agreement.
How Does Dispute Resolution Work?
The Dispute Resolution Management Process (DRMP) became fully operational on January 1, 2026. It applies only to disputes between OGSCC members relating to commercial practices covered by a specific provision of the Code.
Before submitting a formal complaint, members must exhaust internal dispute resolution and escalation mechanisms. If no such mechanisms exist in the agreement, parties must first attempt resolution through their designated representatives and then through senior management escalation, with 30 days allowed at each step.
The DRMP includes optional mediation (non-binding, OGSCC-funded for up to four hours) and formal adjudication. Adjudication decisions are non-legally binding but final under the Code. If a breach is found, the OGSCC publishes a Notice of Non-Compliance naming the offending party, and the member must submit a remediation plan within 30 days.
What Does Membership Cost?
Annual dues are scaled by company size based on Canadian grocery sales:
Dues collection began January 1, 2026. The fee schedule is available at canadacode.org.
What the Code Does Not Do
The Code does not regulate food prices, dictate listing fees, or guarantee product placement. It does not require retailers to accept products or place orders, and it does not require suppliers to accept orders. It does not override Canadian law, including the Competition Act. Compliance with the Code does not exempt participants from any other legal or regulatory obligations.
The Code sets standards for how business is conducted. It does not determine the commercial outcomes of those dealings.
Common Questions from Exporters
Q: Is Code membership mandatory? No. The Code is voluntary. But all five major grocery groups have endorsed it, and Code protections and dispute resolution access require OGSCC membership by both parties.
Q: Should international suppliers join the OGSCC? Suppliers trading with Code signatories should evaluate membership as part of their market entry planning. Membership provides access to the dispute resolution process and signals commitment to fair dealing.
Q: Does the Code apply to distributor relationships? The Code covers commercial relationships between grocery retailers and suppliers. If you sell through a Canadian distributor who then sells to retailers, your direct commercial relationship is with the distributor, not the retailer. Review your distributor agreements against Code standards regardless.
Q: Where can I find the full Code text? Official information including the full Code text, DRMP manual, membership application, and guidance materials are available at canadacode.org.
Canada as a Business Opportunity
The Canada Grocery Code of Conduct represents a structural change in how the Canadian grocery sector operates. For international food exporters, it creates clearer expectations for commercial relationships with major retailers and their distribution partners.
Exporters entering Canada should review existing or proposed agreements against Code standards. Look for provisions that conflict with Code requirements, such as unilateral amendment clauses, vague fee structures, or termination without notice. Reference the Code during negotiations. Retailers who have endorsed the Code have committed to its standards.
The Canadian market continues to offer stability, premium pricing, and access to 41 million consumers. And the new Code adds a layer of commercial predictability that benefits suppliers.
To learn more about the Canada Grocery Code of Conduct visit canadiangroceryinsiders.com.
