Canada’s Competition Bureau has finalized an agreement with Empire, the parent company of Sobey’s, compelling the grocery giant to restrict or eliminate the use of property controls due to anti-competitive concerns.
Property controls, embedded in land titles, can restrict competitors from setting up nearby stores (exclusivity clauses) or prohibit the sale of food products at neighboring establishments like pet stores, dollar stores, and gyms, while also limiting the range of goods future tenants can offer (restrictive covenants).
Empire Company Limited, which oversees Sobeys, Farm Boy, Safeway, Freshco, and IGA, faced pressure from the watchdog to abandon property controls following an investigation initiated in 2024 into Loblaw and Sobeys’ use of such practices in the grocery sector.
According to Anthony Durocher, the acting senior deputy commissioner of the Competition Bureau, Loblaw has already committed to scaling back its property control usage, and now an agreement has been reached with Sobey’s.
Economist Jim Stanford hailed the agreement as a victory for consumers, highlighting the scrutiny on grocery pricing that led to the investigation of major Canadian grocery chains.
The deal signifies a significant step forward, with Empire agreeing to discontinue restrictive covenants and limit exclusivity clauses, although some limited exclusivity clauses will still be permissible. The Competition Bureau will assess each case individually to ensure fair competition.
Empire’s compliance with the agreement marks progress in fostering competition and innovation in the grocery sector, allowing for more diverse market offerings and potentially lower prices. The Competition Bureau will continue to address property control issues with a focus on promoting fair competition within the industry.