The Competition Bureau of Canada has recently announced its decision to proceed with an investigation into competition within the Canadian grocery store industry. The bureau has secured court orders mandating the parent company of Sobeys to provide documents and testimony related to property controls.
Property controls are legal arrangements that can restrict competitors from establishing stores in specific locations, thereby limiting the potential opening of new grocery outlets. According to the bureau, a lack of competition in the grocery sector can lead to inflated prices, diminished quality, and reduced availability of products.
Concerns have been raised by industry experts regarding the emergence of “food deserts,” areas where residents are required to travel significant distances to access grocery stores. The Competition Bureau initiated its inquiry in 2024, focusing primarily on the Halifax region but also investigating the utilization of property controls nationwide.
The recent court orders pertain to Empire Company Limited, the parent entity overseeing brands such as Sobeys, Farm Boy, Safeway, IGA, Foodland, and FreshCo. By obtaining these orders, the Competition Bureau aims to gain insights into how Empire negotiates property controls and their potential impacts on the market.
Investigations by CBC’s Marketplace and CBC Nova Scotia have uncovered agreements related to numerous properties across Canada, granting the grocer broad discretion in enforcing property controls, potentially allowing for the unreasonable withholding of consent for competition.
While some speculate on the potential impact of the Competition Bureau’s actions on consumer prices, Stuart Smyth, a professor at the University of Saskatchewan, highlights the complexities of store locations within mall structures and the challenges in renegotiating contracts with property management entities.
Smyth suggests that immediate policy changes are unlikely to halt the upward trajectory of food prices, attributing much of Canada’s food supply to imported produce. He remains skeptical about the effectiveness of the government’s recent food security strategy in providing relief to consumers in 2026.
Despite requests for comments from Sobeys regarding the Competition Bureau’s actions, no response has been received as of the deadline. Empire has been given a 90-day timeframe to furnish records and written responses as required by the court orders.