The Competition Bureau of Canada announced on Monday that it is progressing with its inquiry into competition within the Canadian grocery store sector. The bureau revealed that it has secured orders from the Federal Court mandating the parent company of Sobeys to furnish documents and testimony for its investigation into property controls.
Property controls are legal arrangements that can hinder competitors from establishing stores in specific locations, thus restricting the potential locations for new grocery stores. According to the bureau, a lack of competition in the grocery industry can lead to elevated prices, diminished quality, and reduced availability.
Experts studying the sector have expressed concerns that a lack of competition could result in “food deserts,” areas where individuals need to travel significant distances to purchase groceries. The bureau has been delving into this matter since 2024 and has not yet drawn any conclusions of misconduct.
While much of the focus has been on the Halifax region, the bureau is also scrutinizing the utilization of property controls nationwide. The recent court orders pertain to Empire Company Limited, the parent entity of stores like Sobeys, Farm Boy, Safeway, IGA, Foodland, and FreshCo. These orders are anticipated to provide the Competition Bureau with more insights into how Empire negotiates property controls and their potential repercussions.
CBC’s Marketplace and CBC Nova Scotia have unearthed instances of agreements covering numerous properties across Canada. Some documents grant the grocer broad discretion in enforcing property controls, enabling it to unreasonably withhold consent to competitors.
Agricultural and Resource Economics Department professor at the University of Saskatchewan, Stuart Smyth, expressed uncertainty about whether the Competition Bureau’s actions would directly impact consumer prices. He emphasized that the structure of many stores being part of malls influences the contracts they can negotiate, making significant changes a challenging prospect.
Smyth highlighted that a substantial portion of what Canadians consume is reliant on importing fresh produce from the U.S., and fluctuations in the Canadian dollar can impact food prices. He cast doubt on the immediate relief the recently announced food security strategy by the Carney government would provide to consumers in 2026, viewing it as more of a long-term strategy.
Sobeys was approached by CBC News for comment on the Competition Bureau’s recent developments but did not respond by the deadline. Empire has been given a 90-day deadline from the issuance of the order to produce records and written returns.