The Competition Bureau of Canada revealed on Monday that it is progressing with its inquiry into competition within the Canadian grocery store sector. The bureau stated that it has secured court orders from the Federal Court mandating the parent company of Sobeys to provide documents and testimony for its investigation into property controls.
Property controls are legal agreements that can prevent competitors from establishing stores in specific locations, restricting the potential opening sites for new grocery stores. The bureau highlighted that a lack of competition in the grocery industry can lead to increased prices, decreased quality, and limited availability of products.
Industry experts have expressed concerns that the absence of competition could lead to the emergence of “food deserts,” areas where residents must travel long distances to access groceries. Since 2024, the bureau has been looking into this issue, with a particular focus on the Halifax region while also examining the use of property controls nationwide.
The recent court orders issued by the Competition Bureau pertain to Empire Company Limited, the parent company of several supermarket chains including Sobeys, Farm Boy, Safeway, IGA, Foodland, and FreshCo. These orders are anticipated to provide the bureau with more insights into how Empire negotiates property controls and their potential consequences.
CBC’s Marketplace and CBC Nova Scotia uncovered instances of agreements covering numerous properties across Canada. Some agreements granted the grocer extensive discretion in enforcing property controls, enabling them to unreasonably hinder competition.
Despite the bureau’s actions, there remains uncertainty among experts regarding whether this move will have a significant impact on consumer prices. Stuart Smyth, a professor at the University of Saskatchewan, emphasized the challenges in altering the existing structure and suggested that immediate policy changes to halt rising grocery prices are unlikely.
Smyth noted that a considerable portion of Canada’s food supply relies on importing fresh produce from the U.S., and fluctuations in the Canadian dollar can influence food prices. He expressed skepticism about the effectiveness of the government’s food security strategy in providing relief to consumers in 2026.
Efforts to obtain comments from Sobeys regarding the Competition Bureau’s latest actions were unsuccessful, as the company did not respond before the deadline. Empire has been given 90 days from the issuance of the order to produce records and written returns.
