Canada Competition Bureau, Empire Settle Grocery Property-Control Probe

The agreement formalizes commitments Empire announced earlier this year and addresses the company’s use of so-called property controls in the grocery business, according to the Competition Bureau’s Sept. 22 announcement on Canada.ca.

Under the consent agreement registered with the Competition Tribunal, Empire will stop enforcing existing restrictive covenants and will not enter into new ones or ask other parties to establish such restrictions for its benefit, according to the Competition Bureau. The company will also limit its use of exclusivity clauses.

Restrictive covenants can prevent a property from being used by particular types of businesses, while exclusivity provisions can restrict landlords from leasing space to competitors of an existing tenant. Canadian competition authorities have increasingly scrutinized both practices because of their potential to make it more difficult for new grocery stores and other retailers selling essential goods to open.

The commitments are legally binding and enforceable, according to the Competition Bureau’s announcement.

Empire owns grocery banners including Sobeys, Safeway, IGA, Foodland, FreshCo and Farm Boy, among others. The Competition Bureau had been examining Empire’s use of property controls across Canada as part of a broader effort to assess barriers to competition in the country’s concentrated grocery sector.

Jeanne Pratt, Canada’s interim commissioner of competition, said in the Competition Bureau announcement that the agreement is intended to remove obstacles facing new competitors and encourage additional retail competition for everyday essentials.

“The agreement with Empire removes barriers to competition and will support new entry and increased competition from retailers selling everyday essential items,” Pratt said, according to the Competition Bureau. She added that the agency is focused on barriers throughout the food supply chain, with the goal of allowing consumers to benefit from lower prices, greater choice and innovation.

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The settlement follows years of regulatory attention to competition in Canada’s grocery industry. In a 2023 market study, the Competition Bureau concluded that property controls could impede new grocery competitors and recommended that governments consider measures to restrict their use.

Read more: Canada Opens Broad Antitrust Investigation Into Food Supply Chain Amid Cost Concerns

The regulator intensified its scrutiny of Empire this year. In June, the Competition Bureau said it had obtained Federal Court orders requiring records, written information and testimony as it investigated the company’s property-control practices across Canada. At the time, the agency emphasized that the investigation had not reached a conclusion of wrongdoing.

Empire subsequently announced changes to its practices in July, and the Sept. 22 agreement makes those commitments enforceable, according to the Competition Bureau.

The dispute over property controls is part of a broader debate about competition and food affordability in Canada. The Competition Bureau has said that the country’s grocery market is concentrated and that restrictions preventing competitors from securing suitable retail locations can undermine local competition.

Other large grocery retailers have also moved away from such arrangements. The Competition Bureau has said Loblaw Companies Ltd. has taken steps toward eliminating property controls, while Walmart Canada has also announced changes to its use of the restrictions.

The Empire agreement gives regulators an enforceable mechanism governing one of Canada’s largest grocery operators at a time when competition authorities are examining barriers across the food supply chain. The Competition Bureau has said it plans to publish findings from its broader examination of food-sector competition in spring 2027.

Source: Competition Bureau