Private Label and Distribution Agreements

The food-specific regulatory questions that commercial counsel often miss in these contracts.

Private label supply and food distribution agreements are commercial contracts, but like co-packing agreements, they carry a regulatory layer specific to food. The questions that make these agreements different from their equivalents in other industries are regulatory: whose name goes on the label, who is responsible for compliance, who bears the recall obligation, and what happens when CFIA shows up asking questions about a product that two or more parties had a hand in bringing to market.

Commercial lawyers draft these agreements routinely. The food-specific regulatory provisions are where this practice adds value.

Private Label Agreements

In a private label arrangement, a retailer or brand owner sells a product manufactured by someone else under the retailer's or brand owner's own brand. The product may be identical to the manufacturer's branded product, or it may be manufactured to the retailer's specifications.

Regulatory Responsibility

The central question is whose name appears on the label and what regulatory obligations follow from that. Under CFIA's labelling guidance, the responsible name on a food label can be the person who manufactured, processed, or packaged the product, or the person for whom that activity was carried out. In a private label arrangement, the retailer's name typically appears on the label. That creates a regulatory exposure for the retailer that goes beyond the commercial relationship: the retailer is identified as the responsible party on a regulated product.

The private label agreement must address who is responsible for ensuring the product meets the Food and Drug Regulations (compositional standards, allergen declarations, nutrition labelling), who reviews and approves the label before production, who is responsible for updating the label when requirements change (the FOP nutrition symbol being a recent example), and who bears the cost of relabelling if a compliance issue is identified.

Recall Allocation

When a private label product is recalled, the public-facing party is the brand on the label, which is usually the retailer. But the root cause is usually in manufacturing, which is the supplier. The contract can allocate commercial mechanics between the parties: cost sharing, cooperation obligations, internal escalation procedures, audit access, and notice flow. What it cannot do is contract out of the underlying statutory duties that the SFCR imposes on the relevant regulated party. The obligations to investigate under SFCR s. 82, to notify the Minister, and to act to mitigate risk are imposed directly by the Regulations on the operator conducting the regulated activity, regardless of what the commercial agreement says. The agreement should be drafted with that constraint in mind. See Product Recalls: A Practical Guide and Co-packing and Contract Manufacturing for how this principle operates in related contexts.

Specifications and Change Control

Product specifications in a private label agreement are not just commercial terms. They define the product that the label describes, and if the product deviates from the specification, the label may become non-compliant. The agreement should address who approves changes to ingredients, suppliers, formulation, or process, and what happens if a change is made without approval. A supplier that substitutes an ingredient without notice can turn a compliant label into a non-compliant one, with recall exposure for the retailer whose name is on the package.

Issues to Resolve Before Papering the Deal

The following issues should be resolved between the parties before the agreement is drafted. These are the questions that, if left to boilerplate or omitted entirely, generate the disputes and the regulatory exposure.

  • Responsible name: whose name appears on the label, and what regulatory exposure follows from that identification.

  • Label approval: who reviews and signs off on the label before production, and who is responsible for updates when requirements change.

  • Change control: who approves ingredient substitutions, supplier changes, packaging changes, and specification modifications, and what is the consequence of an unapproved change.

  • Stop-ship authority: which party can halt production or shipment if a compliance issue is identified, and under what conditions.

  • Recall notice flow: who notifies whom, in what order, and within what timeline when a potential recall event arises.

  • Audit rights: which party can inspect the other's facility, records, and processes, and on what notice.

  • Record access: who holds the batch records, testing results, deviation reports, and complaint files, and who can access them quickly enough to respond to a CFIA request (the SFCR typically requires document production within 24 hours).

  • Cost allocation: who bears the cost of a recall, a relabelling, a CFIA-directed corrective action, or a compliance remediation.

Distribution Agreements

A food distribution agreement governs the relationship between a food company and the party that moves its products through the supply chain. The regulatory layer is thinner than in private label or co-packing, but it is not absent, and it generates real problems when it is ignored.

Storage, Handling, and Cold Chain

The SFCR imposes requirements on how food is stored, handled, and transported. A distribution agreement should address temperature control obligations, storage conditions, and the allocation of liability if product is damaged or rendered non-compliant during distribution. For temperature-sensitive products, the distribution agreement is where the cold chain responsibility transfers from the manufacturer to the distributor. If that transfer is not documented, a product that arrives at retail in non-compliant condition becomes a dispute about whose obligation was breached, with no clear contractual answer.

Traceability

The SFCR traceability requirements (one-up/one-back) apply at every link in the supply chain. The distributor must be able to identify the source and the immediate recipient of each lot. The distribution agreement should confirm that the distributor will maintain traceability records and produce them within the required timeline if CFIA requests them. A distributor that cannot trace product when a recall is underway creates a scope problem: if you cannot identify which lots went where, the recall expands.

Recall Cooperation and Regulatory Response

A distributor does not typically bear the primary recall obligation, but it is a critical link in the recall execution chain. The distribution agreement should require the distributor to cooperate in a recall (stopping distribution of affected product, notifying downstream customers, providing distribution records), and it should specify what that cooperation looks like operationally. It should also address how CFIA communications are handled: if CFIA contacts the distributor about a product, the agreement should specify who responds and how the manufacturer is notified.

Exclusivity, Territory, and Regulatory Overlap

Distribution agreements often include exclusivity and territory provisions. In the food context, these intersect with regulatory considerations. A distributor with exclusive rights in a province with an active EPR programme may inherit stewardship registration and reporting obligations. A distributor handling product across provincial borders needs to account for differing labelling requirements (particularly Quebec). These regulatory overlaps should be addressed in the agreement rather than discovered in a compliance notice.

Where Counsel Fits

These are contracts that commercial lawyers draft regularly. The value food regulatory counsel adds is in the provisions specific to food: the regulatory responsibility allocation, the labelling approval and change control process, the recall obligations (including the line between contractual allocation and statutory duty), the traceability and record-keeping requirements, and the storage and handling obligations that flow from the SFCR. These provisions are where the agreement either anticipates the regulatory scenario or fails to.

GSJ&Co. drafts and reviews private label supply agreements and food distribution agreements for brand owners, retailers, manufacturers, and distributors. Contact info@gsjameson.com or +1 (647) 638-3994.

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Last updated: March 2026. This page is maintained by GSJ&Co. and updated when there are material changes to the regulatory framework governing food supply and distribution agreements.