Canada’s Competition Bureau has come to a resolution with the parent company of Sobey’s to restrict or discontinue the use of property controls due to concerns over anti-competitive practices. Property controls, such as exclusivity clauses and restrictive covenants, have been found to hinder competition by preventing rival grocery stores from opening nearby or restricting what products can be sold by neighboring retailers. Empire Company Limited, the owner of various grocery chains including Sobeys, has been urged by the consumer watchdog to eliminate these property controls. Following an investigation that began in 2024, the Competition Bureau has now secured agreements with both Loblaw and Sobey’s regarding the use of property controls.
Economist Jim Stanford noted that the probe into the grocery giants’ property control practices was initiated after federal hearings in 2023 aimed at addressing escalating grocery prices. Stanford highlighted the resistance faced in convincing Sobey’s to abandon these practices, emphasizing the significance of the recent agreement in curbing anti-competitive behavior and benefiting consumers.
The deal reached with Empire marks a victory for the Competition Bureau and consumers, signaling a recognition of the negative economic and moral implications of such practices. Previous investigations revealed restrictions on nearby businesses, including dollar stores, from offering discounts on popular national brands. Empire, in a statement to CBC News, expressed satisfaction in resolving the property control issue and reiterated its commitment to enhancing its network of stores nationwide.
While the agreement prohibits the use of restrictive covenants, it allows for limited application of exclusivity clauses, permitting Empire to prevent direct competitors from establishing outlets in shared developments. The Competition Bureau’s guidance acknowledges the potential pro-competitive nature of limited exclusivity clauses in specific scenarios where they encourage investments and foster competition. The bureau, empowered by increased enforcement authority granted by the federal government, continues to scrutinize the industry for barriers to competition, aiming to promote fair market practices that benefit consumers.