Manitoba has significantly reduced the use of property restrictions by grocery giants to prevent potential competitors from establishing nearby, following the enactment of legislation last year. Currently, only one major grocery chain, Sobeys Capital Incorporated, continues to employ such controls. The province is now urging Sobeys to reconsider this practice.
In a letter sent to Sobeys CEO Pierre St-Laurent, Minister of Public Service Delivery Mintu Sandhu expressed a desire to discuss the removal of these controls. Sandhu indicated that if Sobeys does not cooperate, the matter will be referred to the municipal board in the upcoming spring for evaluation of whether the property restrictions, specifically restrictive covenants and exclusivity clauses, are in the public interest.
Sandhu emphasized the negative impact of these restrictions on competition within the grocery sector, which ultimately affects food prices and the cost of living for Manitobans. The government passed a law last year prohibiting grocery stores from impeding potential competitors unless they registered their restrictions within 180 days of the law’s enactment. While some controls were abandoned by the deadline, Sobeys registered 43 property controls across 25 locations in Manitoba.
The government aims to challenge these registered controls and potentially escalate the matter to the municipal board for review. Sandhu highlighted the importance of fair competition in the grocery sector to ensure affordable access to food for consumers. The NDP government believes that increasing market access for various grocers, including independent businesses, could help lower food prices.
The identified property controls span Sobeys, Safeway, FreshCo, and IGA locations in several Manitoba cities. Despite the government’s efforts to engage with Sobeys on this matter, the company has not responded to requests for comment. Food economist Mike von Massow suggested that Sobeys might be reluctant to remove property controls due to concerns about the impact on pricing and competition dynamics.
Von Massow noted that while removing these controls may not necessarily lead to lower grocery prices, it could influence customer behavior and market dynamics. The government’s initiative to address predatory pricing in the grocery sector reflects ongoing efforts to promote fair competition and affordability for consumers.