Canada’s Competition Bureau has come to an agreement with the parent company of Sobey’s to restrict or discontinue the use of property controls, following findings that this practice is anti-competitive.
Property controls, which involve clauses in land titles that can hinder rival grocery stores from opening nearby or restrict the sale of food products at neighboring retailers, have been a focus of scrutiny on Empire Company Limited, the owner of Sobeys and other grocery brands. The Competition Bureau initiated an investigation in 2024 into the use of property controls by major retailers like Loblaw and Sobeys, leading to commitments from both companies to address the concerns.
Economist Jim Stanford highlighted the significance of this agreement, emphasizing that it marks a positive development for consumers and signals a shift towards addressing economically and morally questionable practices in the grocery sector.
The deal with Empire Company Limited, the second-largest grocery network in Canada, underscores the importance of curbing restrictive covenants and limiting exclusivity clauses. While the agreement restricts the use of restrictive covenants, it permits a controlled application of exclusivity clauses in specific circumstances, as outlined in the Competition Bureau’s guidance for retailers.
The Competition Bureau’s increased authority to enforce property control rules, granted earlier this year by the federal government, aims to promote competition, innovation, and lower prices in the grocery industry. This move is seen as a step towards fostering a more competitive marketplace and addressing concerns around market dominance by major grocery chains.
Moving forward, the Competition Bureau will continue its efforts to address property controls and explore barriers to competition in the food supply chain, signaling a proactive approach to promoting fair competition and consumer choice in Canada’s grocery sector.
