Canada’s Competition Bureau has finalized an agreement with Empire, the parent company of Sobey’s, to restrict or eliminate the use of property controls due to concerns about anti-competitive behavior. Property controls, such as exclusivity clauses and restrictive covenants, can impede the opening of rival grocery stores or limit the sale of food products in nearby establishments. Empire, which owns several grocery brands, has faced scrutiny from the consumer watchdog over its use of property controls. The Competition Bureau’s investigation into this matter followed federal committee hearings in 2023 focused on escalating grocery prices.
Economist Jim Stanford noted that Sobeys initially resisted discontinuing these practices but eventually agreed to the terms outlined in the agreement with the Competition Bureau. The deal is seen as a victory for consumers and reinforces the bureau’s stance against anti-competitive practices in the industry.
The agreement requires Empire to cease utilizing restrictive covenants but permits limited use of exclusivity clauses to prevent direct competitors from setting up shop in shared developments. This allowance is subject to specific conditions outlined in the Competition Bureau’s guidance for retailers. The bureau has identified instances where limited exclusivity clauses may be justified, emphasizing their commitment to fostering competition in the grocery sector.
Empire Company Limited, the second-largest grocery network in Canada, has expressed satisfaction with resolving the property controls issue with the Competition Bureau. Meanwhile, the bureau continues its efforts to ensure a fair marketplace by examining barriers to competition in the food supply chain and monitoring compliance within the industry. The bureau’s expanded enforcement capabilities aim to promote fair competition and encourage innovation to benefit consumers.