The Competition Bureau of Canada revealed on Monday its ongoing investigation into competition within the Canadian grocery market. The bureau has secured court orders mandating the parent company of Sobeys to provide documentation and testimonies related to its scrutiny of property controls. These controls are legal arrangements that can impede competitors from establishing stores in specific locations, thus restricting the opening of new grocery outlets.
According to the bureau, a lack of competition in the grocery sector could lead to increased prices, diminished quality, and reduced availability of products. Experts in the field have expressed concerns that such a scenario may give rise to “food deserts,” where individuals have to travel considerable distances to access groceries. The bureau has been delving into this matter since 2024, primarily focusing on the Halifax region but also examining the utilization of property controls nationwide.
The recent court orders obtained by the Competition Bureau pertain to Empire Company Limited, the corporate parent of various store brands including Sobeys, Farm Boy, Safeway, IGA, Foodland, and FreshCo. These orders aim to furnish the bureau with more insights into how Empire negotiates property controls and their potential effects. Investigations by CBC’s Marketplace and CBC Nova Scotia have unearthed multiple instances of agreements governing numerous properties across Canada.
Some of these agreements grant the grocer broad discretion in enforcing property controls, enabling it to unreasonably withhold consent for competition. Analysts in the food industry are uncertain whether the bureau’s actions will impact consumer prices significantly. Stuart Smyth, a professor at the University of Saskatchewan, emphasized that altering the existing structure could pose challenges and does not foresee immediate policy changes to stem the rise in grocery prices. Smyth highlighted that Canada heavily relies on importing fresh produce from the U.S., and fluctuations in the Canadian dollar can influence food costs.
Regarding the recently introduced food security strategy by the Carney government, Smyth doubts it will alleviate consumer burdens in 2026. He suggested that the strategy’s effects might not be noticeable until the following year or over the long term. Despite requests for comments from Sobeys on the Competition Bureau’s actions, no response was received within the deadline provided. Empire has been given 90 days from the issuance of the order to produce records and written submissions as required by the Competition Bureau.
