Cheese giant enters standoff with Canadian supermarkets over fines as pandemic supply challenges mount
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Lactalis’ letter comes amid rising hostilities between suppliers and retailers in the grocery business, with the food manufacturing sector pushing back against fees charged by big supermarkets.
Fees and fines have long been a sore spot in the sector, but tensions flared this summer when Walmart started charging suppliers new fees to help pay for its multi-billion-dollar infrastructure investments. Loblaw followed with a similar new fee last month.
Fines for light shipments in the middle of a pandemic only escalated those tensions, said Graydon at FHCP.
“In a normal time, this would be aggravating,” he said. “In the middle of a worldwide pandemic, where the numbers are going through the frigging roof and we’re in lockdown, to continue this behaviour is just … it’s ridiculous.”
Graydon said manufacturers can be forced to pick and choose which orders they fulfil when supply is strained, making decisions based on which stores charge big fines for light shipments. That, he said, often ends up harming smaller grocers that don’t have the power to charge fines.
In recent months, the Canadian Federation of Independent Grocers (CFIG) has sided with suppliers in their fight to get federal and provincial governments to intervene by introducing regulations to stop grocery chains from bullying farmers and food processors.
“We applaud what this company is doing,” said Gary Sands, senior vice-president at CFIG. “We hope others follow suit and say, ‘No.’”
