Canada’s largest grocery chains, such as Loblaws, Sobeys, and Metro, are utilizing property law to regulate competition from other grocery stores, dollar stores, pharmacies, and gas stations, according to an investigation conducted by CBC’s Marketplace. These property controls involve agreements between a landowner and a retailer that dictate the types of businesses allowed to operate on the property and the products competitors can sell. While common in various industries, property controls have sparked criticism within the grocery sector.
Economist and grocery industry critic, Jim Stanford, pointed out that these practices benefit major corporations rather than small businesses, as they operate with fewer competitive constraints. Marketplace uncovered numerous property controls hidden in lease agreements or directly registered on property titles across Canada. The extent of these controls varied significantly from one property to another.
Some agreements stipulate that grocery giants cannot unreasonably block competitors or restrict food sales, while others grant them full discretion. For instance, a Sobeys property control in Winnipeg prohibits the sale of food on adjacent land without Sobeys’ approval, which could be withheld arbitrarily. Similarly, a Metro property control in Waterloo restricts the type of food products a Shoppers Drug Mart can sell and imposes limitations on nearby restaurants.
While Metro and Sobeys deny that property controls hinder competition, Loblaws admitted that these controls limit competition but emphasized a need for industry-wide changes. Stanford highlighted how property controls benefit both property owners and retailers while disadvantaging consumers.
In response to rising concerns, the Competition Bureau is investigating the use of property controls by grocery giants to manipulate competition. The Manitoba government introduced legislation to address this issue, requiring grocery companies to register property controls and potentially cancel them to promote fair competition. Federal Industry Minister Melanie Joly expressed a commitment to monitoring the situation to ensure a competitive grocery market.
