Competition Bureau, Empire reach deal on grocer's property control commitments
The competition watchdog says Sobeys' parent company Empire Co. Ltd. has formalized its commitment to winding down property controls, which can limit rival grocers from setting up shop nearby.
The Competition Bureau said Tuesday (Sept. 22) the grocer has agreed to officially stop using so-called restrictive covenants, which many retailers have used to prevent rivals from opening a store on their former site after moving away.
Empire is the parent company of multiple grocery banners including Sobeys, Safeway, IGA, Foodland and FreshCo.
Under a consent agreement registered with the Competition Tribunal, Empire will no longer use or enforce land restrictions. It will also limit its use of exclusivity clauses, which prohibit landlords from leasing space to another tenant that competes with an existing tenant.
The commitments will be legally binding and enforceable, the bureau said.
Empire spokesperson Sarah Dawson said the grocer is pleased to have "resolved the matter of property controls with the Competition Bureau."
Empire pledged in July to stop using such measures, shortly after the competition watchdog broadened its probe into Empire's use of property controls countrywide through a Federal Court order.
The court order granted the bureau access to additional information at a national level, such as how the grocer negotiates property controls and their effects on competition.
Property controls have drawn attention from regulators, politicians and the public in recent years as high food prices have increased scrutiny of competition in the grocery industry.
The Competition Bureau began investigating various grocers for their use of property controls in 2024, after a report on the sector described property controls as a tool that retailers may be using to curb competition in local markets across Canada.
Some major grocers, including Walmart Canada and Loblaw Cos. Ltd., have previously pledged to axe property controls relating to retail competition.
