Canadian Council of Grocery Distributors (CCGD)

June 5,2007

Diane Audet

Competition Bureau

50 Victoria Street

Gatineau, QC

KIA OC9

Fax: 819-953-2931

Email: audet.dlane@cb-bc.gc.ca

Dear Ms. Audet:

Re: CCGD Response to the Competition Bureau regarding 'Environmental claims: A guide for industry and advertisers"

Please accept the attached as the Canadian Council of Grocery Distributors (CCGD) response on the above guide. CCGD is the association representing the Grocery Retail and Foodservice Distribution industry in Canada. The food distribution and retail grocery industry is Canada's second largest commercial sector, next to the automotive industry. Our members represent $70.1 billion in grocery and $12 billion in food service sales and employ over 455,000 Canadians. Our members represent 85% of all grocery (i.e. food, non-food, nonalcoholic beverages) distribution sales in Canada and are committed to providing consumers with the information that they need to make informed environmental choices.

As you will see from the attached, the guide has far reaching implications for our members as they each operate across municipal and/or provincial boundaries and also purchase products from International and/or domestic suppliers who label for national, and/or international sale, and not regional sale of products. This, in conjunction with the provincial and municipal patchwork of waste management programs (i.8. availability of recycling, composting, etc.) across the country, is extremely important to bear in mind when finalizing the guide. We very much appreciate this opportunity to comment on the guide and will be requesting a meeting with the Competition Bureau to discuss our comments in greater detail.

Sincerely,

Justin Sherwood

Vice President Western Region, Canadian Council of Grocery Distributors

403-250-6608, jsherwmd@ccad.ca, http://www.ccgd.ca/

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CCGD Response to the Competition Bureau Consultation on "Environmental claims: A guide for industry and advertisers'

Introduction:

On behalf of the Canadian Council of Grocery Distributors (CCGD) please accept this document as stakeholder input into the Competition Bureau Consultation on the draft document 'Environmental claims: A guide for industry and advertisers."

The Canadian Council of Grocery Distributors (CCGD) is a not for profit organization committed to advancing and promoting the grocery and foodservice distribution industry in Canada.

We recognize, advance and promote industry best practices for the benefit of our members and the Canadian Consumer.

The food distribution and retail grocery industry is Canada's second largest commercial sector, next to the automotive industry. Our members represent $70.1 billion in grocery and $12 billion in foodservice sales and employ over 455,000 Canadians. Our members represent 85% of all grocery (i.e, food, non-food, non-alcoholic beverages) distribution sales in Canada.

Context:

The Canadian retail grocery and food distribution industry sells a wide variety of products to Canadian consumer that provide environmental information to the consumer on the label (or make environmental claims), and that fall within the scope of the Consumer Packaging and Labelling Act . In addition given the scope of provisions 52 (1) and provision 74 of the Competition Act , the application of IS0 14021 to environmental claims, as outlined in the draft document 'Environmental claims: A guide for industry and advertisers" has far reaching implication for CCGD members.

In examining the guide and preparing this response, CCGD felt it was important to highlight to the Competition Bureau the variability of recycling and end of life disposal mechanisms available to Canadian consumers as this will have implications for practical implementation of IS0 14021 within the Canadian context. In addition, CCGD felt it equally important to outline the national and multination dimension of procurement and distribution, by the retail grocery and food distribution industry in Canada, in order to provide a framework for our comments on the substance of the draft guide. Recognition should also be given to the limits of space available for informational material on consumer packaging, particularly given that such information must be provided in French and in English.

In Canada, waste management (including the provision of recycling and municipal composting programs) is the purview of municipal and regional governments. These programs are enabled through provincial regulations that typically identify the types of programs to be operated, specifications for landfills etc, and the range of materials to be captured within any diversion (e.g. recycling, composting, etc) program. This arrangement of provincial regulation and municipal delivery has resulted in:

• A patchwork of recycling programs from province to province, with each jurisdiction adopting slightly different waste diversion mechanisms. This means that while mechanisms exist to recycle materials in one province, they may not in another.

• This province by province patchwork is further complicated by municipal and regional differences, with every municipality operating slightly different programs, covering slightly different materials. So what might be recyclable in Toronto (for instance, plastic films) may not be in Ottawa.

CCGD members operate multi-jurisdictionally, that is to say they operate nationally, across a number of provinces or in numerous municipalities, and in doing so distribute/retail products that are produced internationally, or by domestic suppliers who produce products for the national market. While claims and product labelling must comply with regulatory requirements, it is not feasible or practical to introduce requirements for labelling to individual regional or municipal conditions.

Therefore, in producing an environmental claims guide for the industry, the Competition Bureau must recognize that the provisions upon which the guide is based (IS0 14021) and the requirements of the guide itself, must be sufficiently robust to accommodate the variations outlined above, while assisting the industry to comply with the spirit and intent of the Consumer Packaging and Labelling Act and provisions 52 (I) and provision 74 of the Competition Act.

We would also like to bring to the attention of the Competition Bureau that the complex nature of some of the requirements included in the draft document will slow the bringing to market of products for which manufacturers wish to make environmental claims and in some instances will result in product either not being brought to market and/or environmental claims not being made and consumers not being made aware of the environmental advantages of certain products.

Within that context, CCGD's input is as follows:

1 introduction - In order to assist the industry in understanding the scope of the guide it is suggested that more direction in regard to environmental claims in general be added to the Introduction i.e. the guide addresses only IS0 14021 self-declared environmental claims (Type II environmental labelling) and does not deal with IS0 14024 type I environmental labelling). It is important to note that some manufacturers already have 3 rd party certification in place. It is-unclear from the draft guide whether or not the validation for Type II claims differs from Type I claims and if so how.

3.4 Environmental improvement - This sections states that "the use of self declared claims will not, in itself, do anything to improve the environment". We would suggest that self declared environmental messaging both encourages and assists consumers in making informed choices with the desired end goal of altering consumer behaviour thereby improving the environmental outcome. This section also appears to indicate that the potential for regulation and enforcement will encourage an increased supply of and/or demand for environmentally improved products. We would suggest that regulation will not encourage a change in consumer demand for a given product.

4.4 Vague and non-specific claims - We would suggest that, non-specific claims when used directly with more specific claims should be allowed. There are numerous examples of this in the marketplace. Non-specific, more general, statements have proven to be more consumer-friendly and therefore identifiable by the consumer and when used in conjunction with more specific claim(s) do not mislead the consumer. For example: Environment Canada's use of statements such as “Look for the EcoLogo. This label is used to identify a wide range of environmentally friendly products and services" and “EcoLogo for products and services that are less harmful to the environment”, etc. in promotion of the Ecologo.

4.5 Definition of "...free” (comments also apply to 5.16 and 5.17) - There seems to be a discrepancy between the language of IS0 14021 (5.4) and the explanatory language provided in the guide below the clause. Based on our interpretation, section 5.4. states that a claim of “...free” can only be made if the levels of the substance are below what would normally be found as a trace or background substance, while the explanatory note states that you cannot make a claim of '...free' based on absence of ingredients that were never part of the product. CCGD's rationale for outlining this apparent discrepancy is that the prohibition outlined in the explanatory note could prevent industry from providing - (useful and accurate) information to the consumer upon which to base a purchasing decision.

To use the CFC example provided:

• Although most consumers are aware that a pump spray bottle does not contain CFC, providing that information to the consumer reinforces environmentally sound purchasing decisions. Taking the example given of hairspray sold in a pump spray bottle versus the same product sold in an aerosol can, it seems to us that consumers would be encouraged to behave in an environmentally friendly manner by being reminded on the packaging of the pump spray bottle that this item does not contain CFC.

• Preventing the use of the 'no CFC" claim in the situation above may actually penalize environmentally friendly innovation by preventing a manufacturer of a product that never contained the identified substance from advertising the absence of that substance. While the manufacturer of a product which formerly contained that substance and no longer does would be permitted to make the claim.

(Note: As CFCs are now completely banned in Canada, we would suggest that an alternate example be considered for use in the guide.)

We do recognize that claims of “...free” must be accurate and truthful, CCGD would however recommend that the Competition Bureau expand its explanatory language to allow for claims of “...free” based on comparisons to other products within the same product category. This would allow for the use of “CFC Free" in the case of the pump spray scenario, if compared to existing product that utilized CFCs as a propellant.

Specific to the 'chemical free" example on an organic product, the claim should be allowed as this claim is relevant when the product is compared to a broad category that includes both organic products and non-organic products.

The chemical free/organic example is really no different than the lead free example

Further to this, CCGD would also point out that similar to food, there should be a provision that allows a statement to the effect '...Free, like all similar products" where the Substance in question is not present in the product and not present in similar market products e.g. This product is contained in a CFC-free pump spray bottle - all pump spray bottles contain no CFCs."

Thus the test should not be whether the free applies to the specific product but whether the category of products contains these more environmentally harmful elements or is produced in a relatively more environmentally harmful way.

Finally, we would suggest that the notion of 'product" and/or 'product category" throughout the guide might benefit from some definition.

4.6 Claims of sustainability - Although CCGD agrees that measuring sustainability is complex, there is more information known each day that tells us that many things can be done to help assure sustainability. We would suggest that as long as a claim for sustainability is not absolute and instead infers that the element in question may help in promoting sustainability, and that it can be shown in some way to 'help", then it should be allowed.

5.3 Self-declared environmental claims, including any explanatory statement - CCGD requests greater clarity with regard to the intent of 'verification material must be available to both the purchaser and a potential purchaser as such material may be required to effect purchasing decisions". If this is meant to apply to the end user (i.e. the consumer) then we would suggest this is impractical and we would not be in a position to support this as some of the information would be proprietary and not of a nature that could be disclosed to the public.

5.4 Self-declared environmental claims , Including any explanatory statement - CCGD would encourage the Competition Bureau to provide further clarification and examples of 'appropriate context or setting" as defined by clause 5.7 of IS0 14021.

5.5 Self-declared environmental claims, including any explanatory statement – CCGD requests greater clarity in regard to this section e.g. would claims such as “100% recycled fibre" be acceptable?

5.6 Self-declared environmental claims , including any explanatory statement - Similar to the comments provided in regard to Section 4.4, we suggest that more vague claims should be allowed as long as there is a dear connection with more specific claims. The more general claims are necessary to broadly describe a collection of products to consumers. As illustration, Environment Canada themselves use generic language to describe product categories e.g. Envirozine: Biofilms: An environmentally friendly approach to contaminated site remediation, etc.

5.7 Self-declared environmental claims, including any explanatory statement – CCGD requests more clarity on the intent of this section. Multiple environment benefits may indeed result from one product change and assuming such multiple benefits can be shown to be true we would suggest that there should be no reason to disallow the statement of all such benefits. The intent of environmental claims is to encourage the consumer to make better choices. By inferring multiple benefits there will be a greater likelihood that the consumer will then make better choices. Additionally, in stating multiple benefits, some of these benefits are likely to be more understandable for consumers as it relates to every day use e.g. comparing greenhouse gases to number of cars on the road. These statements are more likely to result in a change of behaviour on the part of the consumer.

5.9 Self-declared environmental claims, including any' explanatory statement - We also request greater clarity on the intent of this section. This section appears to require that all claims would need to have a positive net effect. If this is correct industry would need to assess how feasible it is to conduct such evaluation for every situation. Perhaps if the draft guide provided additional examples (e.g. for 100% recycled fibre, x% post-consumer waste, etc.) the intent of the section would become more clear.

5.13 Self-declared environmental claims, including any explanatory statement - We would suggest that this section as written is too restrictive and would result in virtual elimination of recyclng claims. Recycling programs vary significantly from municipality to municipality and are ever changing. A degree of flexibility is required to encourage these claims. By allowing such claims to be made consumers become aware of the potential to recycle such materials and with this information will encourage or seek out recycling of such materials in their community.

5.14 Self-declared environmental claims, including any explanatory statement - CCGD finds the interpretation of IS0 14021 clause 5.7 m) provided in this draft document to be very restrictive and not in line with other Canadian regulations and/or guidelines that allow industry to use a given statement and/or graphic icon on the main display panel to link to supporting information on another part of the label if needed. We would suggest that the interpretation of this IS0 clause be more flexible taking into consideration that consumers are already familiar with this approach and should allow industry to continue doing this. In respect to 'reasonable size", the CPLA already provides minimum font size requirements (i.e. 1/16 inch). We would also suggest the option of directing consumers to a website or 1-800 number for additional information.

5.16 and 5.17 Self-declared environmental claims, including any explanatory statement -

See comments under 4.5.

5-18 Self-declared environmental claims, including any explanatory statement - As we have indicated previously, daims for absence of "x" that are dear with resped to an item indicating that all similar products do not contain X or never contained 'x' should be allowed. This is in keeping with other principles of labelling for other categories e.g. food. We would suggest that environmental claims should be held to a similar level of acceptance as other labelling statements.

7 The Mobius loop - CCGD would request clarification on the following industry questions:

I. Based on IS0 14021 and the Bureau's interpretation of the standard, can the mobius loop be utilized on biodegradable and compostable product/packaging?

II. Again based on IS0 14021 and the Bureau's interpretation of the standard, is it permissible to use the mobius loop in conjunction with a material number/symbol i.e. some manufacturers for polystyrene containers, plastics containers, etc. surrond the material number with the mobius loop. Section 6.5 appears to state that this would be allowed but we find this section to be unclear when read with sections 6.1 and 6.2. The explanation under section 6 seems to suggest that the only symbol that would be allowed is the Mobius symbol. CCGD supports the use of different symbols/icons when properly executed and supported by the requirements set out in the final guide.

8.1 Responsibilities of the claimant - We would suggest that 'claimant' refer specifically to the manufacturer.

8.2 Selection of evaluation and claim verification methods - We suggest that not all statements need the level of review suggested here. We understand this section to infer that all claims should have a complicated method of review and with Deer review when in fact many statements will be straightforward calculations and not necessitate a specific method of review or development e.g. when calculating % difference of weight of material used

8.3 Access to Information - Most environmental claims are likely to have a component of confidential business information (i.e. confidential to the public/consumer or other like businesses). Under these circumstances we suggest that it should not be necessary to then require 3 rd party audits as long as the information can be made available to government authorities as needed, then claims verified by the vendor should be acceptable. Additionally, in keeping with other label claims under CPLA independent of environmental claims, this level of 3 rd party review is not necessary and we suggest should not be necessary here. And further, requiring 3 rd party audits to this extent will only add unnecessary cost and ultimately serve to discourage environmental claims.

9 Comparative claims - In order to assist the industry to comply, CCGD would encourage the Competition Bureau to provide additional examples dealing with the use of comparative claims between an organization's product and that of a wmpeti6r, as well as the appropriate use of comparative claims based on percentages and absolute values.

10.1.2 Claims of 'Where facilities exist" (comments also apply to 10.2.2, 10.7.1 and 10.7.2) -

As outlined within the context above, the degree of recycling and waste diversion capabilities from province to province and municipality to municipality varies considerably. In addition, CCGD members distribute domestic and internationally produced products in a national or multi-jurisdictional 'context. Labelling each product to municipal requirements is not feasible, nor in most cases, is there sufficient packaging space to provide consumers with detailed information regarding what materials are acceptable within each municipality in Canada. As such the requirements outlined within 10.1.2 are simply unworkable within the Canadian context. CCGD would strongly encourage the Competition Bureau to revisit 10.1.2 to provide the industry with a workable solution keeping in mind such factors as minimum allowable font sizes, limited label space and the requirement to provide the information in both French and English in conjunction with all other mandatory label information i.e. short, concise statements that can be used in all jurisdictions are needed. Example: To put this in context with other mandatory statements such as 'return for refund". Given the very limited amount of space that exists (especially in the beverage category), manufacturers needed to move to the combined statement 'recycle or return for refund where applicable" which takes a considerable amount of space as the 'return for refund" statement is required to be double the size of the minimum font ( i.e. 118 inch).

As previously indicated, we suggest this guide should not disregard the educational component that is provided to consumers by providing general statements such as'Recydable where facilities

exist". The broad messages Where recydable", '... where facilities exisr advise consumers that the product is recydable and may or may not be recyclable in their jurisdiction and that they should check with their local recycling programs and if not recycled in their jurisdiction encourage the addition of the material to their local programs. In conjunction with such statements consumers also receive educational material from their local municipalities outlining what is and is not recyclable in their area.

10.21 Usage of tern (Compostable) - CCGD has been participating in a process being led by the Bureau de normalisation du Quebec (BNQ) to develop a certification process for compostable plastic bags. As such we would encourage the Competition Bureau to ensure that the BNQ is aware of this consultation and to ensure a linkage between the guide and the certification process under development.

10.22 Qualiffcations (Compostable) -See comments under 10.1.2

10.3 Degadabk and 10.4 Designed for disassembly - As previously suggested the details of the claims are too specific in many cases. CCGD agrees that the intent should be that the consumer must not be misled, but at the same time there must be some flexibility in language and wording that allows one to be more general depending on the jurisdiction in which the product is being sold. Without such flexibility industry will not use the statements and the consumer will not be educated to the fact that environmentally positive handling of the product might exist in their own or other jurisdictions.

10.7.1 Usage of tern (Recyclable) - See comments under 10.1.2

10.7.2 Qualifications (Recyclable) - See comments under 10.1.2. We would suggest that the use of the Mobius loop on its own should continue to denote that the packaging is recydable. This has been the standard practice for quite some time. If it is used to infer the recyclable content of a package then a statement of recydable content should accompany the Mobius symbol. If 'Recyclable where facilities exist" is to be discouraged then we would suggest that government work with industry to determine what 'conveniently available to a reaskable proportion of

purchasers. ..." means. In the Dast this was rouahlv defined as 30 % of the Canadian w~ulation. ~urther,in the past, assuming at least 30% of tie ~Canadian population had access, a siatement Were facilities exist" was used and acceptable. If 30% of the~anadianp opulation is not met then either the statement was not used or more specific wording was used. The current benchmark on the Canadian marketplace seems quite reasonable to 61p encourage statements. We would suggest that the benchmark suggested in the draft document is not doabie and will discourage the use of the claim.

10.8.2 Qualifications (Recycled content) - CCGD requests darity in regard to the statement 'consideration shall be given to the fact that a higher percentage of recyded content does not necessarily imply a lower environmental impact". It would appear that the recyded statement is being held to a much higher standard than other claims and we suggest that this is unacceptable.

It the statement is ttue and can be demonstrated to have an environmental effect then it should be allowed.

10.12.1.1 and 10.12.1.2 QualMcatlons (Reusable and rflllable) - We also request clarity as to why products would need to be designed to be reusable/refillable only with the same or similar product? If other purposes are available and these are subsequently described to the consumer then we suggest that reusable/refillable should be allowed. Additionally, in the examples provided, as similar to general statements before, the clarifying information to support the claims appears quite onerous. We suggest that the manufacturer must be allowed to rely to a degree on consumers seeking out information on how to reuselreiill product, etc.