Canada’s Competition Bureau has settled an agreement with Empire, the parent company of Sobey’s, to restrict or cease using property controls due to anti-competitive concerns. These controls, found in land titles, can hinder rival grocery stores from opening nearby or restrict the sale of food products at neighboring retail establishments. Empire Company Limited, owner of various grocery brands, has been urged by the consumer watchdog to eliminate these controls. The bureau’s investigation, initiated in 2024, targeted the use of property controls by major grocery chains to understand their impact on the industry. Following Loblaw’s commitment to reduce its use of these controls, Sobey’s has now also agreed to comply.
Economist Jim Stanford noted the significance of this development, emphasizing its positive implications for consumers. The probe into property controls by Canadian grocery giants was prompted by federal committee hearings in 2023 addressing escalating grocery prices. While Sobey’s initially resisted abandoning these controls, the new agreement signifies progress in rectifying these practices.
Under the deal with the Competition Bureau, Empire is mandated to refrain from enforcing new or existing restrictive covenants but can still utilize exclusivity clauses within limits. These clauses can prevent direct competitors from establishing outlets in shared developments. The bureau’s guidance allows for selective use of exclusivity clauses in specific circumstances where they can enhance competition by incentivizing investments in new shopping plazas. The Competition Bureau has identified and will assess 19 such scenarios on Empire-owned properties where limited exclusivity clauses may be justified.
The bureau, empowered by the government earlier this year, aims to facilitate a more competitive environment for grocers and other retailers. By easing restrictions, such as property controls, it is anticipated that increased competition will lead to lower prices, enhanced consumer choices, and greater innovation. Ongoing efforts will focus on addressing barriers to competition in the food supply chain, including production, transportation, distribution, and retail pricing. While progress has been made, there are calls for further scrutiny of food industry monopolies to ensure a fair marketplace for all participants.