Winnipeg Free Press

Winnipeg Free Press (Newspaper) - July 19, 2024, Winnipeg, Manitoba B8 ● WINNIPEGFREEPRESS.COM BUSINESS FRIDAY, JULY 19, 2024 Last major holdouts Walmart, Costco sign on; guidelines expected in place by 2025 Final hurdle clears for grocery code of conduct A LL the major Canadian grocers are now on board for a grocery code of conduct, paving the way for industry guidelines that have been several years in the making. The federal, provincial and terri- torial agriculture ministers made the announcement Thursday during their annual meeting in Whitehorse, saying the remaining holdouts Walmart and Costco have now agreed to sign on to the code. “This is a positive step toward bring- ing more fairness, transparency, and predictability to Canada’s grocery sup- ply chain and for consumers,” the min- isters said in a statement. Confirming the support of the five major retailers — Loblaw, Walmart, Costco, Metro and Empire — is an “im- portant milestone,” said Michael Gray- don, CEO of the Food, Health & Con- sumer Products of Canada association. “It was critical that all of the retail- ers got involved, because it’s a very competitive business,” said Graydon, who led the group that created the code and now chairs its interim board. “It kind of was an all-or-none situa- tion. And I think they all respected that and came to the table.” The voluntary grocery code is meant to level the playing field for suppliers and smaller retailers by providing guide- lines for fair negotiations, including for the application of penalties and fees. In addition to the national, regional and local independent grocers sign- ing on, key suppliers of all sizes have agreed to the code, the board told the ministers in a report Wednesday, add- ing their goal is to implement the code by next June. Federal Agriculture Minister Law- rence MacAulay said he’s “elated.” “Now we have the five major retail- ers signing on, that’s good news for the whole supply chain,” he said. MacAulay said he believes the code will bring more transparency, fairness and predictability into the food indus- try, though he noted it’s not meant to lower grocery prices. The industry committee tasked with creating the code was established in response to contentious fees being charged to suppliers by large grocery retailers, an issue that came to a head in 2020 when Walmart Canada and Loblaw each introduced new supplier fees to help pay for infrastructure investments. Progress on the code appeared to be in jeopardy last fall as it neared com- pletion, with leaders from Loblaw and Walmart telling MPs they were con- cerned the code would lead to higher retail prices. As a result, calls to make the code mandatory grew, with the House of Commons committee studying food prices telling Loblaw and Walmart in February if they wouldn’t sign on, it would recommend the code be made law — an option MacAulay had said he was exploring. In May, Loblaw said it would agree to the code as long as other industry play- ers would do the same, saying its con- cerns had been alleviated by changes to the document. After Loblaw’s announcement, atten- tion turned to Walmart and Costco. Walmart Canada is willing to support the current version of the code, which is now more balanced, said spokeswoman Stephanie Fusco in an email — though there are still important discussions to have about governance and dispute resolution, she added. The milestone is “great news for the industry,” said Gary Sands, a member of the code’s interim board and senior vice-president at the Canadian Federa- tion of Independent Grocers. But he thinks the code is also good news for consumers. “When you bring more stability, fairness and transparen- cy to the industry, that’s bound to have a positive impact on just relationships, on how prices are set.” The board is now turning its attention to setting up the office that will oversee the code and hiring an adjudicator, said Graydon. He’s also hoping a request for government funding to support that work will be approved. — The Canadian Press ROSA SABA FRANK GUNN / THE CANADIAN PRESS FILES Canada’s five biggest grocers have been under intense public and political pressure as the price of groceries has risen by more than 22 per cent over four years. Holland-area grain producers compensated for unpaid deliveries THE Canadian Grain Commission’s (CGC) licensing requirements were sol- id enough to ensure 27 Manitoba grain producers from the Holland area were finally paid for $1.2 million worth of re- cent deliveries. The farmers had shipped their grain to Zeghers Canada in Holland. How- ever, the small elevator company sub- sequently had its licence revoked, amid reports it has gone out of business. Messages left for Zeghers were not returned. If a grain company licensed by the CGC fails to meet its obligations, pro- ducers are eligible for compensation within 90 days from the date of their delivery or within 30 days from the date a cash purchase ticket or cheque was issued to them. The 166 grain companies licensed by the CGC are all required to post a bond, letter of credit, letter of guarantee or payables insurance of an amount rela- tive to the amount of business they’re doing from month to month. The CGC reviewed the individual Holland producer claims, determining the eligibility of 27 of them. The payout represents 100 per cent of the claims made against Zeghers. Since 1981, there have been 32 instan- ces of claims and payouts through the CGC’s Safeguards for Grain Farmers Program, with only seven not able to pay out 100 per cent and five that paid out less than 80 per cent. Christianne Hacault, a spokesperson for CGC, said such claims scenarios do not happen often. “While we do not guarantee a 100 per cent payout, we have a pretty good track record,” she said Thursday. “There have only been a few outliers over the years.” Although the CGC is active across the country, grain companies in Eastern Canada, except those operating on the Great Lakes-St. Lawrence Seaway sys- tem, do not need to be licensed. As well, feed lots, hog barns, stan- dard farming operations who exclusive- ly market their own grain products and dealers who exclusively buy and sell grain produced in Eastern Canada do not need to be licensed. In the past, Hacault said, there have been companies whose licences have been revoked and then subsequently reinstated, if they are able to meet the licensing requirements. martin.cash@freepress.mb.ca MARTIN CASH Wildfire prompts MEG Energy, Imperial to move oilsands workers CALGARY — Out-of-control wild- fires blazing in northern Alberta have prompted fresh evacuations of workers from oilsands sites. MEG Energy Corp. said late Wed- nesday evening that it is evacuating non-essential personnel from its Chris- tina Lake oilsands site, while Imperial Oil Ltd. confirmed in an email Thurs- day it has begun reducing the number of non-essential workers at its Kearl oilsands mine. Both companies said there have been no direct impacts to their sites and the moves are precautionary. “Our first operating priority is to care for ourselves and all others,” said MEG CEO Darlene Gates in a news release, adding production at the com- pany’s Christina Lake site continues as normal. “Our focus is to minimize and mitigate any potential impact on our people and our operations.” MEG’s Christina Lake site is locat- ed about 150 kilometres south of Fort McMurray in northeast Alberta, while Imperial’s Kearl site is located 70 km north of Fort McMurray. Christina Lake has a current produc- tion capacity of about 110,000 barrels of oil per day, while Kearl has a produc- tion capacity of 220,000 barrels/day. There are several wildfires current- ly burning in the Fort McMurray area, and Alberta Wildfire classifies the cur- rent wildfire danger in the area as “ex- treme.” The wildfire burning northeast of Fort McMurray was more than 1,000 square km in size and just seven km away from “industrial sites,” Alberta Wildfire said Thursday afternoon. The fire detected Wednesday south- west of Fort McMurray was 150 sq. km in size as of Thursday afternoon and was just 11 km away from Highway 63, an important thoroughfare that con- nects the oilsands and the community of Fort McMurray to Edmonton. Two weeks ago, Suncor Energy Inc. — Canada’s second-largest oilsands producer by volume — evacuated non-essential personnel and curtailed production at its Firebag oilsands site north of Fort McMurray. The company has not disclosed how much production has been taken offline. The fires and the threat they pose to oilsands production have helped boost Canadian oil prices this week. West- ern Canada Select heavy crude was up $1.73, or 2.63 per cent, on Wednesday. — The Canadian Press Calgary cannabis company SNDL to lay off 100 CALGARY-based cannabis and li- quor retailer SNDL Inc. is laying off more than 100 people in restructur- ing the company says will produce $20 million in cost savings. Winnipeg-based Delta 9 Cannabis owes SNDL about $40 million via debt instruments. SNDL’s recent issuance of demand payment notices to Delta 9 were the impetus for the Manitoba firm to file for creditor protection with the courts this week. As part of that process, Delta 9 has entered into a proposal with another cannabis retailer, Toronto-based FIKA Company, for FIKA to acquire Delta 9’s 41 retail stores in Western Canada. Delta 9 stated in its court filings it believed SNDL’s “aggressive” actions were a prelude to an attempt by SNDL to seize Delta 9’s assets. SNDL owns 188 cannabis retail locations under various banners, in- cluding Spiritleaf, Value Buds, Super- ette and Firesale. It is the largest cannabis retailer in the country. FIKA, which owns more than 100 cannabis stores across the country (including some in partnership with Delta 9) is one of SNDL’s closest rivals. Delta 9 will present its plan of ar- rangement in court next week, as part of its Companies’ Creditors Arrange- ment Act creditor protection process. martin.cash@freepress.mb.ca MARTIN CASH Ta-dum: Netflix subscriber, earnings growth gather more momentum NETFLIX’S subscriber and earnings growth accelerated in its latest quarter as the video streaming service benefits from a crackdown on freeloading view- ers, an expansion into advertising and an acclaimed programming lineup. The results announced Thursday painted a portrait of a company still gathering momentum after a jarring decrease in subscribers during the first half of 2022 prompted a change in dir- ection. Netflix added eight million subscrib- ers during the April-June period, mark- ing a 37 per cent increase over the same time last year. It was the sixth-consecu- tive quarter Netflix’s subscriber gains have increased from the previous year, a trend triggered by the 2022 downturn that served as a wake-up call for the Los Gatos, Calif., company. And Netflix is still financially thriv- ing. The company’s profit in its latest quarter rose 44 per cent from last year to US$2.15 billion, or US$4.88 per share — a figure that exceeded the estimates of analysts polled by FactSet Research. Revenue climbed 17 per cent from last year to US$9.56 billion, also eclipsing analysts’ projections. But management predicted its rev- enue for the July-September period would rise at a slightly slower pace of 14 per cent from the same time last year, lagging the 18 per cent growth analysts had been anticipating. Given the competition in video stream- ing seems to be ramping up again, In- vesting.com analyst Thomas Monteiro called “the lowering of guidance an in- telligent strategy for keeping excitement put amid sky-high expectations.” As part of a shakeup that began in mid-2022, Netflix has been blocking the previously widespread practice of shar- ing subscriber passwords with friends and family living in other households. It also introduced commercials for the first time as part of a low-priced ver- sion of its service. Since those moves began rolling out two years ago, Netflix has picked up nearly 55 million more paying custom- ers, pushing its worldwide subscriber count nearly 278 million through June. But Netflix is bracing for the gains from the password-sharing crackdown to taper off, prodding the company to sharpen its focus on selling more ads for its low-priced option, which the company said ended June with a 34 per cent in- crease in total subscribers from March. It didn’t detail precisely how many of its worldwide subscribers have chosen to watch ads for the cheaper price. — The Associated Press MICHAEL LIEDTKE GENE J. PUSKAR / THE ASSOCIATED PRESS FILES International video streaming giant Netflix reported Thursday a US$2.15B profit in its most recent quarter. ;