Competition Bureau Puts New Tools to Work to Spur Competition in Grocery Sector

May 24, 2024 – Reporting this week confirms that the Competition Bureau is investigating grocery giants Loblaws and Sobeys for their efforts to restrict competition in Canada’s grocery sector. Restrictive covenants, terms baked into property lease agreements, limit the ability of tenants to operate businesses in those same properties. As shown by reporting last year by the Halifax Examiner, these covenants have been used to prevent existing retailers from entering and competing in the grocery sector to the detriment of Canadians.

Grocers make use of these covenants in their dual role as landlords, with controlling interests in major real estate investment trusts (REITs). By controlling how property can be used in major markets, grocery retailers can fence off prime real estate and ensure that competing grocery stores are unable to open despite growing demand. By investigating the impact of these arrangements, the Bureau is putting to the work the new enforcement tools given to them by the cross-party supported Bill C-56, which allowed the Bureau to pursue abuses of dominance with the intent to reduce competition in a market.

“After years of bearing the brunt of the rising cost of living, Canadians deserve to see the new powers they gave the Bureau put to work,” said Keldon Bester, Executive Director of the Canadian Anti-Monopoly Project. “By breaking down the barriers to competition put up by incumbents we create the opportunity for a more competitive and affordable future.”