The Competition Bureau of Canada declared on Monday that it is progressing with its investigation into competition within the Canadian grocery store sector. The bureau confirmed that it has secured orders from the Federal Court mandating the parent company of Sobeys to furnish documentation and testimony for its probe into property controls.
Property controls are legal arrangements that have the potential to hinder competitors from establishing stores in specific locations, thereby restricting the potential areas for new grocery outlets. In a news release, the bureau highlighted that the absence of competition in the grocery industry could lead to elevated prices, diminished quality, and reduced availability.
Concerns have been raised by industry experts regarding the possibility of creating “food deserts” due to limited competition, where residents have to cover long distances to access grocery stores. The bureau has been examining this issue since 2024 without reaching any conclusions of misconduct.
While much of the investigation has been concentrated in the Halifax region, the bureau is also scrutinizing the utilization of property controls nationwide. The recent court orders obtained pertain to Empire Company Limited, the parent firm of various stores including Sobeys, Farm Boy, Safeway, IGA, Foodland, and FreshCo.
The Competition Bureau stated in a release that the new court directives will offer additional insights into how Empire negotiates property controls and their potential ramifications. Investigations by CBC’s Marketplace and CBC Nova Scotia revealed numerous agreements covering multiple properties across Canada.
Certain documents granted the grocer broad leeway in enforcing property controls, allowing it to unreasonably or arbitrarily withhold consent for competition. There is uncertainty among experts in the grocery and food industry about whether the bureau’s actions will have a tangible impact on consumer prices.
Professor Stuart Smyth from the University of Saskatchewan mentioned that the structure of many stores within mall settings is contingent on contracts with property management entities, making changes challenging. He expressed skepticism about any immediate policy measures that could halt the upward trend in food prices.
Smyth emphasized the reliance on imported fresh produce from the U.S., noting that fluctuations in the Canadian dollar can influence food costs. He cast doubt on the effectiveness of the recently announced food security strategy by the Carney government in alleviating consumer burdens in 2026.
Sobeys was approached by CBC News for comments on the Competition Bureau’s latest actions but did not respond before the deadline. Empire has been given a 90-day deadline from the issuance of the order to produce records and written responses.