What is the GROCERS CODE OF CONDUCT Doing for Canadians?
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Summary
On today's show, Mike and Mike talk about the new code of conduct in grocery stores and the impact it could have on grocery prices. Plus, they talk about what it means for the grocery industry and how it impacts consumers across the country.
Transcript
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hi i'm mike thanks for joining us don't forget to subscribe and tell a friend tplmedia.ca for
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all kinds of great shows we we put up like four or five a day all of them focused on the stuff
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that's important to canadians today's no exception to that let me ask you is your grocery bill coming
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down week over week month over month i'm going to guess the answer is no are you noticing any
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real relief at the grocery store from the grocers that you frequent i'm guessing the answer is no
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but that's weird because now they're being held to a code of conduct uh joining me to talk about it
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today reporter at large and contributor for tpl shaliza backus thanks for coming in hey hey thanks
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for having me well uh to have somebody to talk to about this uh might make me feel a little less
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crazy you're not crazy and actually i've actually got some extensive experience working in the retail
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grocery sphere if you want if you will yeah no that's that's actually uh that was part of this
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discussion you were like wait i have opinions on this and i i have an experience not only uh do you
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have people that in your world that you uh you know relations that are in the business you've also
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participated for many years in the grocery business many years yeah you do you want to say where uh no
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okay so uh fair enough here's what the code of conduct was meant to do now you tell me if i'm if i've
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missed anything uh it was meant to create fair rules between uh big grocery chains and and the
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suppliers so that there wasn't price gouging and you know uh fixing prevent grocery giants from bullying
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smaller food producers okay i don't uh maybe we can touch on that one a little bit because that it's a
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little that one's a little misty to me uh stop surprise fees and sudden contract changes imposed
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on suppliers that means uh you know when you supply something and they can't sell it where does it leave
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you in that position how does pricing go and and uh bullying in that regard i'm sure occurs all the
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time and then to improve transparency in how food gets priced and sourced i still have no idea how that
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happens so i'm not sure how they're educating us i'm honestly not sure either i mean i i feel like
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recently obviously with everything happening south of the border we've all been pushing like buy
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canadians support canadian brands what does that even mean does that do anything for our economy
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does it make it better does it make it a better experience in the grocery store i don't think it
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does i'm not sure that the uh tariff impact is even being applied in many of the places that would
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affect food but you know that's for the experts to talk about but what i really do think is that
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since this came on it was like a really big show actually i put down who was involved there's a lot
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of people i make notes on occasion but i don't know what i'm talking about tell you okay tell you
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so it'd be loblo so these metro costco and walmart okay so this was a multi-stakeholder discussion
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and uh it was designed to rebalance retailer supplier relationships so that's important to note it was
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meant to rebalance retailer and supplier relationships not retailer and consumer relationships
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and i think that has been made pretty clear that the consumers aren't i i don't know what the
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consumers are really benefiting benefiting from this well apparently there's no guaranteed uh lower
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prices which i think was i thought that's what the mission was however even in the code of contact
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conduct that's not it the code wasn't designed to reduce grocery prices and uh they said that we
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won't likely see cheaper food bills anytime soon in fact this is the same group that's telling us
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the the code of conduct group those retailers and those grocers and the suppliers are all telling
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us well you better be on the lookout for higher food prices they're the ones warning us that more
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more is going to come out of our pockets uh impact on pricing is uncertain so you know
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they're not giving us any predictive data about how we should be pricing our food in the
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the next next year um that seems weird to me benefits uh they will say take time so these
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relationships and rescoring these relationships we won't see the results of it for some time
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why didn't we start it sooner right agreed i mean i don't think it's just recently that prices have
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been rising that the consumers have been affected and i'm all for you know supporting canadian and trying
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to support canadian suppliers and things like that but honestly if i went into the grocery store and i
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saw an american brand for 199 and a canadian brand for 299 which one do you think i'm buying no i mean
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it's just common sense our economy is in such a place that you have to buy according to price in many
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many cases yeah we would love to have the option to say i'll buy canadian at you know 25 more
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but we're already tapped i don't see consumers really i i think that if you have a decent income and
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you're not struggling grocery visit to grocery visit yeah maybe looking at only canadian items
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or you know focus on that but most canadians most people are focused on the price at the checkout
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what uh now in the business that you've you know the business what are you seeing if any effects of
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this code of conduct like what is happening at the retail end in all honesty not much you if you're
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working at store level you're basically taking instructions from whatever the big guys have to
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say and yes we're trying to focus on highlighting canadian products and there was a whole big spread
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with that and amongst all the major retailers i think we're really trying to highlight canadian
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things and then that slowly fizzled away because i think i think they realized it wasn't sustainable
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i think you know if we're getting stuff from not the states necessarily but from places like the
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dominican republic anywhere else in the caribbean sometimes those ethnic produce items have to come
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from there and so they're still kind of cheaper you're still not really supporting canadian but
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then you're not supporting the u.s so i think it just became very confusing for a lot of people so
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that's why all of this proudly canadian stuff slowly started to fizzle out i think it's a symptom of
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something else i'll take a quick left if i may i think that we want to cling to something that is
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patriotic in this country that we can come together for and say we will not let the u.s steamroll us
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we want to buy canadian we have the power to do it look at us we are a strong nation
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which in some cases puts in a puts us in a position to be viewed as virtue signaling when
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eight months later people are kind of like yeah i can't i don't know i don't know who owns it from
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the u.s sure i don't know who owns this i i gotta go let's put it in the i think that that is a
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really uh a limited i think you're right there was a limited time on that that people would tolerate
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it now we expect our government to be making deals to bring in other groceries a couple of the ideas
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that got floated around by the way i'll give you some stats you want to hear some stats people love
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stats stats canada data shows that food prices increased by three percent between may
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2024 and may 2025 even as the code was being introduced so cost is continued to go up i guess
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inflation does that maybe it would be higher without the code i i don't know i think it would be the same
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if i'm being honest again i don't feel like this code really benefits consumers or puts them at the top
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of mind and i think it's more for behind the scenes operations that maybe they can cover their own
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butts with certain things that maybe they couldn't do before or they were doing before that were not
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ethical it almost feels like they're getting the government's approval to go and do what they were
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already doing and just you know say they're doing something else maybe i'm wrong about that we'll see
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the the stats show differently though uh widespread concern about costs remain high 81 percent of canadian
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surveyed worried about rising grocery costs uh food inflation hit a two-year high of 4.7 percent
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almost five percent increase in food year over year that's wild that is wild that's wild is anybody
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making five percent more at work absolutely not absolutely not and i'm like thinking about you know
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and we were talking about this before we hit record we were talking about like european grocers and
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international grocers and i'm just thinking that got me thinking a lot about like the cost of
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flour for example the cost of wheat for example obviously has gone up but can you compare the
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flour that we manufacture here in canada to the flour in italy no it's completely different oh wow
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okay that was a harsh one no we can't do flour like italy does no we can't no we can't yeah that's so
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true but but we would love to have that market brought to us it's prevented potentially at the
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moment it feels like it's all so expensive for mediocre quality you know a lot of the food that
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is manufactured here it's making people sick and it's not getting any cheaper so what are we doing
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here in fact that that packaged and over processed food is just going up in price yeah beyond anything
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else as well uh no that's a really good point well let's talk about that then okay so maybe it's time
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maybe this code of conduct isn't what we need or it's only part of the solution i think the other part of the
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solution is well let's look at the profits loblaws did four billion dollars in ebitda that's earnings
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before interest tax debt and uh ah i can't remember what the as for appreciation any ideas i don't know
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so but that was their before cost profit last year for their shareholders they had a booming year
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and by the way that's the same almost a little bit more actually than what bell canada posted as
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their profitable ebitda last year so do we i mean there's two monopolies obviously that we're looking
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at that are doing very well that are kind of untethered for consumers i think it's time so here was one of
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the ideas we had open up the market why don't we open up the market okay bring in other countries with
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chains maybe even italian chains with good flour i'd i'd be i'd be the first person in line imagine
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what the olives would be like at your italian uh import grocery store but i mean let's let's incite
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them to be able to come here get space compete in the marketplace bring their supply chain with them
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and then make a deal with them to stay here unsupported and unpurchased by other larger
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entities so they can't be bought up by loblaws or walmart or costco and they have to keep in that
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position for 10 years well why wouldn't we do that to see what would happen if we open up the market
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beautiful things can happen if people want into the market with their product they will find their way
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in on our terms that might be a better position for consumers it might be but then how do you go
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about that and how do you think the government would be okay with that really you know i think that one
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of the things we forget is that the government is us right and although they wield a lot of power
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the only reason we got a uh uh a gcoc which by the way i think uh what's it uh the uh grocery code
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of conduct i was gonna do the acronym i thought you were i thought that's where we were going
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but i'll keep it classy the thing is when we this came about because we had an issue and we pushed the
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government so hard if we did the same thing to say okay this isn't working nice try guys
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you didn't really give us a solution that we were demanding what we want is an open market
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um the other idea jim lang uh throwing around at our staff meeting the other day and if you have
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one by the way comment do you have ideas about how we should be doing this better because we'll bring
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it back we revisit topics this one definitely comes up a lot um what if we put subsidies out there
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on the basics the flour the bread the grains the uh butter the milk right all of our basics all the
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things that we need as standard basics why don't we subsidize that then i mean price anything else
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outside of that as it needs to be because those are not necessities but maybe the necessities need
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to be handled yes and i think that's what it comes down to is that the average canadian is struggling to
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afford just the necessities we're not talking about the sugary breakfast cereals the you know tv dinners
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literally bread milk eggs uh you and i were talking bread just went up yeah the off-brand i mean the
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off-brand loaf of bread where i work was 199 for the longest time yeah that's a reasonable price for a
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loaf of processed bread yeah and just recently it went up to two over two dollars i think 249 or something
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like that so so it went up significantly and mind you the wonder bread is on sale for the same price
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so we're really there's no incentive no to buy canadian to buy local to buy at that at that
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grocer's and we'll actually reach out into other markets because the pricing's similar and the brand
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is known exactly and you're looking at that for everything not just loaves of bread if you're walking
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the whole store and you see the off-brand they're within pennies of a difference of the brand name stuff
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so what are we doing here and what's the difference yeah we really do need to address
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that especially supporting local brands we want to get back to making stuff here in canada
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not importing it let's make product and subsidize it so that we can get it into the stores
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uh and uh make it affordable yeah make it affordable what are the uh any any other things that you see at
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the retail and that this code of conduct is causing uh retailers i mean i think a lot of i think it's
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confusing consumers more than anything because i think that they think something like this comes into
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effect as an average consumer okay that means things are going to drop that means prices are
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going to drop people who don't understand how the business works how overhead costs works how supply
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chains work they just instantly think they're going to walk through the doors and they're going to see a
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difference right and understandably nothing can happen overnight no that's fair but things can
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happen quickly exactly certain things can happen quickly and i feel like trying to cap food prices
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or trying to lower them is something that could have happened a little quicker especially if you're
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a company making over four billion dollars in a year you want to hear what they're saying what are
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they because they will they will come back so i made some notes about some of the stuff that the
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grocers have said uh they'll say the code of conduct uh code of conduct was not meant to cut grocery prices
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prices okay uh and they'll say some resisted it at first but walmart canada loblaws initially
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hesitated to sign on to the code partly because of concerns about its potential impact on operations
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and pricing so some of them are even lumbering into this code of conduct because they're like i don't
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know this doesn't really work in our business model so even what they're putting out there the big guys
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costco and walmart are saying really this doesn't work for our model so i don't know what you want
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us to do they're not adhering to anything so with that being said then doesn't that mean that the
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model needs to be revisited yeah 100 i believe they'll also argue that they're already working
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on affordability for example costco's leadership has told lawmakers the company isn't seeking extra
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profit from inflation and works with suppliers to reduce costs meanwhile costco are the guys that if
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they don't sell your product they want you to come pick it up and you don't get paid until it's been
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banked for 90 like the deal for the suppliers can't be any better than it is for the consumers
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there's just no way it's not so maybe what we need is a different mediary intermediary in there that is
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not loblaws or costco or or uh walmart or metro metro i mean the other one yeah that's it so be so be
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you know what between us we would have finished the quiz but yeah um i do think that something has to
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happen i i think we have to do something that focuses on putting food in our bellies that's
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healthy at prices that we can afford and then anything outside of that we can start to make
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the free market but i think it's time to reign this in i don't think the grocery code of conduct is
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working i don't i don't think it is either and again as an average consumer walking through a store
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if you see a frozen tv dinner on sale go on what what kind salisbury steak the uh what is it the
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the pasta ones like the the cheddar and whatever okay i like those two yeah those two but they're
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filling and they're quick and they're easy yeah you can grab five of those for the price that it
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would cost you to buy pasta vegetables sauce whatever the case is right so that we're struggling
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with that too because we're thinking about the price tag but then we're like well if i can get
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full for this that is not healthy whatsoever it's pumped full of sodium and preservatives and all of
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those things yeah and but some of us just simply can't afford the fresh ingredients one more thing
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fresh butcher okay so i go to fortino's and i go to these this is my own personal experience there's no
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libel here this is my experience i go there and i see the price on meat and it is outrageous at this
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moment and then i go to the local butcher and i'm going to name them too toterra fine foods you'll
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find them in maple no they don't pay me to say this best meat in the country at lower pricing than
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i'll find at any of those larger chains so why is that how is that explain the meat cup is the meat
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not coming from the same place or is it not it's definitely not because the quality at toterra is so
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much higher than what i get at any of the chains that there's no way it's coming from the same place
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and something is getting in the way of the pricing make it make sense make it make sense
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uh can you help us make sense of it maybe you're even in the grocery business maybe you are a grocer
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but certainly uh if you have an opinion or some information you think that we should pass along
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put it into the comments we'll bring it up and we'll share it around shaliza thanks so much thank you