Canada’s Competition Bureau has finalized an agreement with Empire, the parent company of Sobey’s, to restrict or halt property controls due to their anti-competitive nature. These controls, embedded in land titles, can inhibit rival grocery stores from establishing nearby or prevent certain products from being sold at adjacent retailers. Empire, the owner of various grocery brands, including Sobeys, Safeway, and Farm Boy, had faced pressure from the consumer watchdog to eliminate these controls. The Bureau’s investigation, initiated in 2024, uncovered the use of property controls by major grocery chains like Loblaw and Sobeys, leading to commitments from both companies to address the issue.
Economist Jim Stanford highlighted the significance of the agreement, emphasizing its benefits for consumers and the acknowledgment of the wrongful nature of such practices by the Competition Bureau. The deal marks a victory for the Bureau and consumers, signaling a shift towards fairer competition in the grocery sector. Land title documents obtained by CBC’s Marketplace revealed restrictions on nearby retailers from selling perishable items within a certain radius of major grocery stores.
While Empire is now obligated to refrain from enforcing new or existing restrictive covenants, they are permitted limited use of exclusivity clauses. These clauses allow the company to prevent direct competitors from opening outlets within shared developments, provided it aligns with the Competition Bureau’s guidelines. The Bureau will assess exclusivity clause applications on a case-by-case basis to ensure fair competition. The federal government granted the Bureau enhanced authority earlier this year to enforce property control regulations, facilitating a more competitive market landscape for various retailers.
Looking ahead, the Competition Bureau aims to continue addressing property control issues within the grocery industry and examining barriers to competition. This ongoing scrutiny includes investigations into production, distribution, and pricing practices across Canada’s food supply chain. Despite these positive steps, there are calls for further measures to prevent monopolistic behaviors in the sector. The impact of these developments on fostering a more competitive and consumer-friendly grocery market remains to be fully realized.