“This is a positive step towards bringing more fairness, transparency, and predictability to Canada’s grocery supply chain and for consumers,” the ministers said.

In the statement, Canada’s federal, provincial and territorial Ministers of Agriculture said “years of work and widespread industry participation” has been put into developing the Code of Conduct. Until recently, Walmart and Costco were the only two major grocery retailers to not join the Code of Conduct. Metro and Sobeys signed on last year, while Loblaw agreed this past May after months-long negotiations and a social media-driven campaign by angry consumers urging others to boycott Loblaw stores due to high prices.

Stemming from friction between retailers and suppliers, the code was developed by the industry to promote transparency and fairness, and to solve disputes. It’s been in the works since 2021.

“The goal of the Grocery Sector Code of Conduct is to bring fairness, transparency, and predictability to our grocery sector and supply chain,” a statement from AAFC said after Loblaw joined the Code of Conduct in May. “We believe that uniting all supply chain partners around these principles will produce the best outcomes for the sector and all Canadians.”

—with files from Janelle Rudolph

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“We are ensuring a fair and equitable environment for our growers, which is fundamental for the prosperity of the entire supply chain,” said FVGC in a news release.

FVGC’s executive director, Rebecca Lee, is listed as a member of the steering committee in charge of developing the code.

The industry-developed code, which proposes rules for fairness and transparency in the grocery sector, is expected to stabilize growers’ incomes, the FVGC said.

“Canada’s Grocery Sector Code of Conduct acts as a protective measure for the entire supply chain,” it added. “It addresses longstanding issues such as payment terms and contract fairness, which are crucial for the viability and sustainability of Canadian growers.”

It isn’t expected to increase costs to consumers, the news release said.

The code has run into headwinds in recent days as two of Canada’s largest grocers expressed reluctance to sign on to it.

Last week, Loblaw executive chair Galen Weston told the standing agriculture committee the code as currently written would cause higher prices, and Walmart Canada chief executive officer Gonzalo Gebera expressed similar sentiments.

Weston said Loblaw takes issue with clauses that govern written contracts with suppliers, whether retailers can charge suppliers fees when orders aren’t fulfilled, and others.

Michael Medline, CEO of Empire Company Ltd., which owns Sobeys, supports the code.

“This code is not a document comprising overly prescriptive regulations, but simply a straightforward set of principles of good behaviour developed by industry itself. That’s it. It won’t increase food prices, as Loblaw has claimed,” said Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers.

–with files from Karen Briere. Geralyn Wichers is associate digital editor of AGCanada.com.

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The company said in a release Monday that it “took immediate action and engaged cybersecurity and recovery experts” when it learned of the problem, and its in-house and third-party experts are investigating.

A company representative said separately via email Monday that the incident has caused “operational and service disruptions that vary by business unit, plant and site” but didn’t specify which facilities were or are affected or how.

Mississauga-based Maple Leaf’s operations in Canada include hog slaughter plants at Brandon, Man. and Lethbridge, Alta.; five fresh poultry plants in Ontario and one at Edmonton; hatcheries in Ontario and Alberta; five feed mills in Manitoba; and pork and poultry further-processing sites in five provinces. The company in late September also announced it had completed construction work on a major new poultry plant at London, Ont.

“Our farms have adjusted their practices due to the system outage, and we feel confident in our ability to care for our animals and meet their needs,” Maple Leaf said via email.

Asked Monday about the nature of the incident — a ransomware attack or computer virus, for example — Maple Leaf wouldn’t specify, but said via email it’s “deploying our business continuity plan and implementing workarounds to mitigate the impact on our operations and business.”

Meanwhile, it said it “expect(s) some disruption in our operations and service levels” as it works on “restoring business continuity.”

In its release, it said it “will continue to work with all its customers and suppliers to minimize these disruptions.”

Maple Leaf’s systems outage isn’t the first cybersecurity breach to affect Canada’s meat packing sector. Canadian operations of Brazilian meat packer JBS briefly halted last summer when that company’s U.S. arm was hit by what was later confirmed to be a ransomware attack.

Elsewhere in Canada, major grocery firm Empire Co., whose retail chains include Sobeys, Safeway, IGA and FreshCo among others, also announced Monday its operations have been affected by an unspecified “IT systems issue.”

Empire said in a release its grocery stores remain open as usual and aren’t yet seeing “significant disruptions,” except that some in-store services are “functioning intermittently or with a delay” and some in-store pharmacies are “experiencing technical difficulties in fulfilling prescriptions.” — Glacier FarmMedia Network

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In a deal still subject to review by the federal Competition Bureau, Empire Co. announced Monday it will pay $800 million for the grocery chain, currently co-owned by a management group and investment firm Berkshire Partners. The deal is expected to close at the beginning of next year.

The Ottawa-based chain, which started with a single store at Cornwall, Ont. in 1981, now includes 26 stores mainly in southeastern Ontario, with plans now afoot to expand its space in southwestern Ontario and the Greater Toronto Area (GTA) — areas where Empire says its own chains are so far “under-penetrated.”

Those expansion plans are expected to continue as “early priorities” for the Farm Boy business under Empire ownership, “through a combination of new site builds and conversions of some existing Sobeys locations.”

Nova Scotia-based Empire described Farm Boy as a “highly scalable” platform with “industry-leading” growth and metrics, which will allow Empire to accelerate its own growth in urban markets.

Boston-based Berkshire has owned an unspecified equity stake in Farm Boy since 2012. Its managing director Chris Hadley said at the time that the Farm Boy stores “deliver a unique fresh and friendly shopping experience compared to other food retailers.”

Farm Boy bills itself as carrying “hundreds” of Ontario products from local suppliers, including fresh produce, meats, dairy and cheeses, baked goods, seafood and fresh prepared foods, including gluten-free, organic and “natural” items.

“Farm Boy has a best-in-class brand with stellar customer loyalty,” Empire CEO Michael Medline said in a release, noting the chain’s offering are “particularly appealing to urban and suburban consumers.

“We believe we will be able to build on their historical industry leading same-store sales growth of 5.3 per cent and five-year (compound annual growth rate for earnings) of 21 per cent to double the size of the business in the next five years.”

Working with Empire, “we will strengthen the already-strong Farm Boy brand, starting with urban and suburban markets in Ontario and eventually rolling out to other areas of Canada,” Farm Boy co-CEO Jeff York said.

York and co-CEO Jean-Louis Bellemare will remain in their roles for the long term, reporting to Medline and managing the business separately from Empire’s other operations, the company said. The two co-CEOs also agreed to reinvest in the business in return for a 12 per cent stake in the continuing Farm Boy business, Empire said.

For Farm Boy, the deal allows access to Empire’s “infrastructure and capabilities” in real estate, sourcing and logistics, providing for certain “non-customer-facing synergies” and “faster and even more effective store expansion.” — Glacier FarmMedia Network

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The Nova Scotia-based grocery chain on Tuesday announced ABP’s Island View Farms is now the “primary” brand for beef sold at the five Sobeys, five Co-op and three Foodland stores the grocery company supplies on Prince Edward Island.

The agreement, phased in over the past few weeks, “means P.E.I. customers can choose local first, it means larger herd sizes for P.E.I. and Maritime beef cattle producers, and it means ABP has a committed local partner as it increases plant capacity and grows its business,” Peter Doucette, general manager for Sobeys Atlantic, said in a release.

Sobeys said the agreement means about 80 per cent of the selection at the 13 stores stores is now supplied by ABP, under the packer’s Island View and Certified Island Beef brands.

Sobeys said Tuesday it entered talks 18 months ago with ABP and Atlantic Canada’s cattle producer groups, to make sure ABP’s plant capacity and cattle herds in the region could be expanded to meet the added demand.

The federally-inspected ABP plant at Albany, northeast of Borden, now has the capacity to supply the P.E.I. stores on top of its other existing business, the packer said.

ABP said it’s also looking for more supply from beef producers, to further expand its space in both domestic and export markets. “We hope local producers can ramp up production of beef cattle by at least 10,000 head per year in total,” the company said via email.

Brian Morrison, chair of P.E.I. Cattle Producers, said in Tuesday’s release the grocery chain “has really stepped up in terms of their commitment to local cattle producers. They have sat at the table with us and helped us plan our herd growth to ensure we have the capacity to meet their needs.”

The ABP plant, which was built in partnership with local producers, sources beef from producers in P.E.I. as well as New Brunswick and Nova Scotia and is the only federally inspected cattle slaughter plant in Atlantic Canada.

The plant, however, booked annual losses for years after its opening in late 2004. The P.E.I. government has committed regular funding to ABP since 2009, following a 2007 cash infusion from the federal, Nova Scotia, New Brunswick and P.E.I. governments.

Since then, the plant has set up a ground beef production line and rolled out its branded beef lines such as Island View, Certified Island Beef and Blue Dot Reserve.

The new deal with Sobeys “means additional volume through our plant in a business where volume is a key ingredient to operate efficiently and cost-effectively,” ABP president Russ Mallard said in Tuesday’s release.

“We appreciate the commitment Sobeys is making to assist us in our goal to ensure ABP is here for the producers in our region for the long term.”

The specifics of ABP’s agreement with Sobeys weren’t made public, but the two companies said via email they want to see it continue over the long term.

“We are confident (customers) will be very happy with Island View Farms beef, so we cannot see any reason at this point to be anything but optimistic for a long-term supply arrangement.”

Asked whether the arrangement could eventually expand elsewhere in Atlantic Canada, the two companies said they “want to make sure we get it right on the Island first and then will look to future plans for expansion to other provinces.”

Sobeys, whose roots in Atlantic Canada’s grocery business date back to 1924, has been on an aggressive expansion track coast to coast since 1987, taking over the Thrifty Foods chain in British Columbia in 2007, the Safeway chain in Western Canada in 2013, and several Co-op Atlantic grocery stores last year.

The company also operates the IGA, Foodland, FreshCo, Price Chopper and Lawtons Drugs chains, for a total of over 1,500 stores across all 10 provinces. — AGCanada.com Network

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The grocer members of the Retail Council of Canada (RCC), which include Loblaw, Sobeys/Safeway, Metro and Wal-Mart Canada, said Friday they are “voluntarily committing to the objective of purchasing cage-free eggs by the end of 2025.”

However, David Wilkes, senior vice-president for government relations and the grocery division at RCC, said in a release that the grocers’ commitment is “made recognizing the restrictions created by Canada’s supply management system.”

The cage-free timeline, he said, thus “will have to be managed in the context of availability of supply within the domestic market.”

The RCC also noted the National Farm Animal Care Council (NFACC) expects to release a new Canadian code of practice for layer hens later this year.

When released, NFACC’s layer hen code is expected to guide Canada’s egg sector on various aspects of farm management and welfare practices, by way of “recommendations and requirements for housing, care, transportation, processing and other animal husbandry practices,” the RCC said.

The RCC, Wilkes said, “remains firmly committed to the NFACC process and will work with other participants to not only advance our voluntary commitment to move to cage-free environments by the end of 2025, but also by ensuring suppliers adhere to the code’s recommendations.”

Egg Farmers of Canada (EFC) last month announced a transition plan to move all Canadian layer hens away from conventional battery cage-style housing into “enriched housing, free-run, aviary or free-range” by 2036 — “assuming the current market conditions prevail.”

Without mentioning the RCC announcement, the national egg producer group said in a statement Friday it “look(s) forward to working with retailers to ensure high-quality Canadian eggs remain on grocery shelves everywhere, and we will continue to work with our supply chain to do so and to align our approaches as much as possible.”

EFC on Friday also noted its members have long supported and taken part in the NFACC process and brought last month’s industry plan forward for the NFACC review of the egg industry code or practice.

“We believe a code that takes into account what the egg industry analyzed, developed and proposed to be realistic will be stronger, and a tremendous framework on which to make many other enhancements to our industry for years to come,” EFC said.

EFC also said it’s committed to research on hen housing systems as well as consumer preferences, and to make sure decisions on industry practices are “evidence-based.”

Doing so, the egg producer group said, “ensures choice and price stability to shoppers while protecting the entire supply chain from shortages or the production of eggs for which there are no market.”

EFC also reiterated Friday that the various layer hen housing systems in use today “all have trade-offs across a host of sustainability factors including animal health and well-being, environment, food safety, worker health and safety and food affordability.”

Various non-government animal welfare groups on Friday hailed the RCC’s move, noting RCC grocer members account for 90 per cent of grocery store sales in Canada.

World Animal Protection Canada executive director Josey Kitson said in a separate release that the council’s decision “will have a transformative effect on the way that laying hens are housed in Canada.”

Nathan Runkle, president of the Canadian arm of Mercy for Animals, in another release, called RCC’s pledge “a watershed moment for farmed animals and caring consumers in Canada” and said it marks a “tipping point” for the egg sector.

“Any food company that has not yet adopted a cage-free egg policy is simply out of step with consumer expectations and business trends.”

Major quick-service restaurant chains operating in Canada have made announcements similar to the RCC’s in recent months, varying in the level of housing they expect for layer hens.

A+W said earlier this month it plans to get all its eggs from open-barn suppliers within two years. The owner of Tim Hortons and Burger King said last month it would take the chains’ North American egg supplies cage-free by 2025, and McDonald’s last fall pledged to shift to free-run eggs in the same time period. –– AGCanada.com Network

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The Quebec-based co-op on Wednesday booked net earnings of $47.5 million on sales of $5.875 billion in its fiscal year ending Oct. 31, 2015, up from $38.31 million on $4.662 billion in fiscal 2014.

The company also declared a deep cut in its patronage dividends, at $40.6 million for 2015, down from $92.3 million the previous year and $110.5 million in 2013.

The company, as part of the “Agropur 2015” strategic review it launched in 2012, set a goal that year of “generating $75 million in increased earnings before interest, income taxes, depreciation, amortization and joint ventures” (EBITDA) over 2013 to 2015.

In its 2015 annual report this week, the company instead described its 2012 goal as being “to reduce our costs by $75 million by 2015,” and added it has “exceeded that objective, with savings on an annualized basis of $84 million.”

In its year-end release Wednesday, the company said that for 2016, it has launched a new “three-year, $100 million cost-reduction program.”

Agropur, whose brands include Natrel, Quebon and Island Farms, didn’t specify Wednesday what it plans to do to meet the deeper cost-cutting target.

CEO Robert Coallier said in the annual report, however, that the company “will seek further synergies.”

Agropur in 2015 closed the deals it announced the previous year, buying the assets of New Brunswick’s Northumberland dairy co-operative, and Sobeys’ former Canada Safeway milk processing plants.

“The addition of the five acquired plants gives (Agropur) a national footprint,” the company said Wednesday.

During 2015, the co-op announced plans to shut an aging Montreal-area fluid milk processing plant at Saint-Bruno-de-Montarville by late May this year.

Agropur also said in November it will close the former Grace-Mar Dairy plant at Chilliwack, B.C. by late October this year, upgrade the former Safeway plant at Burnaby and shift its B.C. fluid milk processing there.

The company’s B.C.-based Island Farms arm also announced in October it would discontinue its yogurt line due to “declining” sales in recent years.

On the investment side in 2015, Coallier noted the company also improved its Oka cheese production capacity and completed major upgrades on plants at Lethbridge, Alta. and St-Hyacinthe, Que. plants, plus an aseptic product line at Bedford, N.S.

Agropur, he said, also completed the first phase of a project to standardize its computer platforms and processes under “a single solution.”

Agropur on Wednesday also noted its U.S. operations have contributed a “significantly increased proportion of total revenues” in 2015, at 44 per cent, up from 36 per cent the previous year.

In its U.S. plants, Coallier said, Agropur has increased its feta cheese capacity by 30 per cent and tripled its mozzarella capacity. — AGCanada.com Network

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Pete Luckett, the owner of the Pete’s Fine Foods stores in Halifax and Bedford, N.S. and a related wholesale business, announced Thursday he’ll sell those operations to Nova Scotia-based Sobeys for an undisclosed sum. The deal is expected to wrap up Monday (Nov. 2).

The “open concept” stores specialize in produce and other fresh groceries including deli, bakery, meat and fish sections.

“It’s the right time for me to transition from the grocery industry into the winery business,” Luckett said in Sobeys’ release, referring to Luckett Vineyards, which he opened in Nova Scotia’s Gaspereau Valley in 2011.

Sobeys said it plans to continue to operate the stores under the Pete’s Fine Foods brand and “maintain the unique market culture and customer-focused flair for food on which the business was built.”

Luckett will continue in a “consulting capacity” with the business and its management and staff will be “provided with employment in their current roles,” Sobeys said.

“Pete has instilled a unique culture in his stores and a food offer that resonates with his customers. We don’t want to change that,” Peter Doucette, general manager for Sobeys Atlantic, said in the same release.

Rather, he said, Sobeys plans to “build the Pete’s brand and grow the opportunities for the business in Atlantic Canada. With Sobeys’ resources and ability to support growth and expansion in the region, we can make that happen.”

“With this agreement, customers can enjoy peace of mind knowing that the stores will continue to prosper and expand while offering that same extraordinary shopping experience,” Luckett said.

Luckett, who started his greengrocer career in England’s outdoor food markets, moved to Canada in 1979 and started the “Pete’s Frootique” business in New Brunswick in 1982, eventually shifting his operations to three Nova Scotia stores, the Pete’s Fine Foods outlets in Halifax, Bedford and Wolfville.

The Wolfville store closed in May this year, however, as the company said it “struggled to capture local customers.”

Luckett has become a well-known media personality and speaker during his career in Atlantic Canada. He appeared regularly for 14 years on the CBC TV program Midday, showcasing new and exotic varieties of fresh produce for viewers across the country. He later hosted a “food adventure” TV series, The Food Hunter, on the Food Network from 2002 to 2004. –– AGCanada.com Network

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Co-op Atlantic’s board of directors last month rolled out a proposal in which the organization would make a deal with Nova Scotia-based grocery giant Sobeys for the co-op’s food- and fuel-related wholesale and retail assets.

The board’s now-ratified proposal calls for it to negotiate a deal in which Sobeys would buy the “majority” of Co-op Atlantic’s corporate-owned food and gas retail sites — and Co-op Atlantic’s wholesale assets, which serve the Valufoods grocery and RiteStop convenience store chains.

An undecided number of the “corporate” stores operated by Co-op Atlantic would be sold — but stores owned by Co-op Atlantic’s local-level member co-operatives would remain co-ops, the organization said.

“This decision by member-owners is the best option to ensure the long-term viability of the close to 60 independently owned co-op member stores across the region,” Bryan Inglis, Co-op Atlantic’s interim CEO, said in a release Wednesday.

The independently-owned local co-ops’ stores, he said, will thus have to find new wholesalers to provide their products — and Sobeys, he noted, has already been meeting with each of those co-operatives “to potentially enter into a wholesale agreement.”

“Next steps”

Moncton-based Co-op Atlantic said Wednesday it’s also launched a “full review” of its other lines of business.

Those include its agriculture division, which operates under the Co-op Country Stores banner and deals in feed, seed and farm equipment as well as horse and pet foods and supplies. Co-op Atlantic operates four feed mills in Atlantic Canada and brokerages to buy feed inputs from farmers in the region.

Co-op Atlantic’s agriculture business also invests locally through its Atlantic Tender Beef program and buys vegetables and other produce from farmers in the region.

Co-op Fuels and Petroleum, meanwhile, supplies gas and diesel products, home heating fuel, heating equipment, lubricants and related products to Co-op Atlantic’s farmer members.

Co-op Atlantic also operates 11 Medicine Shoppe pharmacies in Atlantic Canada, and has a real estate arm, Avide Developments, which provides design/build and property development services and operates APHL (Atlantic Peoples’ Housing).

Once Co-op Atlantic’s reviews of those divisions are complete, the co-op said it “will be in a better position to determine next steps.”

“Toughest aspect”

It’s not yet known, Co-op Atlantic said, how many jobs will be affected in a sale of food and gas assets, or when those jobs would be affected.

“The timing of that impact will be determined following the completion of the proposed purchase and sales agreement,” the co-op said. It’s expected to take “a number of months” for Co-op Atlantic to complete that deal and exit the businesses in question.

Job losses, Inglis said, will be “the toughest aspect of the accepted recommendation by member-owners,” but Co-op Atlantic plans to provide affected staff with counseling and resource services “to assist them in finding a new opportunity.” — AGCanada.com Network

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Co-op Atlantic said Saturday its board recommends members vote by a May 12 deadline in favour of the organization divesting its food and fuel wholesale assets.

Co-op Atlantic is the overarching body for 128 co-ops in Atlantic Canada and Quebec’s Magdalen Islands, with stakes in the region’s farm retail input and supply sectors and the home and farm energy business, as well as the food and fuel retail sectors.

Specifically, the board recommends a deal to sell the food and fuel assets — which include Co-op and Valufoods stores across the region, three distribution centres and over 40 gas stations — to Nova Scotia-based grocery giant Sobeys.

A proposed deal would see Sobeys buy “the majority” of Moncton-based Co-op Atlantic’s corporate food and gas retail sites and wholesale assets across the region, the co-op said.

The co-op’s owner-members, the board said, should negotiate wholesale supply agreements with Sobeys “to ensure their long-term success moving forward.” Those potential agreements would be decided by each member-owned store in talks with Sobeys.

Once the members’ vote is complete, Co-op Atlantic said it will be “in a better position to assess what this will mean for Co-op Atlantic and its remaining divisions moving forward, including home energy and agriculture.”

The co-op, and its member co-operatives, “have worked hard to remain viable in the increasingly competitive world of retail food and gas,” board chair Adelard Cormier, of St-Paul-de-Kent, N.B., said in a release Saturday.

“This decision has been a difficult one for management and the board but is, we believe, the best option for the continued viability of the member-owner stores and the co-operative movement in Atlantic Canada.”

“Disservice to everyone”

In its 2012-13 fiscal year, Co-op Atlantic booked total sales of $631 million, up six per cent from the previous year, but noted a two per cent drop in food unit sales.

Co-op members and consumers “have changed their buying patterns, resulting in a contraction of the Atlantic Canadian food market during the past year,” the co-op said in June 2013.

One Co-op Atlantic-operated retail grocery store in Nova Scotia, the Pictou Co-op Food Market, shut down in 2013 citing “declining sales and mounting losses over the last five years.”

The store had a membership of over 8,000, Co-op Atlantic said at the time, but found member support of the food store was “not strong enough to keep the operation viable.”

A study showed nearly 2,200 members at “had not made a single purchase during the past year and only 272 members showed purchases worth over $60 a week.

In late 2010, a Co-op Food Market in Saint John, N.B. also shut its doors, with Co-op Atlantic noting “a full third of the (local co-op’s) 4,200 members were not supporting the Co-op at all.”

“To continue operations with no prospect of profitability would be a disservice to everyone, especially the member-owners of the co-operative system,” Ron Montgomery, area manager for Co-op Atlantic, said at the time.

Sobeys, by comparison, booked $21 billion in sales in fiscal 2014, up 20.6 per cent from the previous year — due in part to its takeover of the Canada Safeway chain in 2013.

The takeover deal saw 30 Sobeys and Safeway stores in Western Canada sold to other retailers, in part to satisfy federal competition regulators — including 14 stores sold to Western Canada’s Federated Co-operatives. — AGCanada.com Network

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