Competition Bureau reaches agreement with Empire on restrictions

Article content

Empire’s IGA store is the only grocery store in the town, which has about 6,000 residents.

The Competition Bureau says its investigation found a property control restriction that came into effect in 2017 protected IGA from competition and ensured it would continue to be the only grocer in the area.

Article content

Building controls are terms built into commercial leases that place restrictions on other tenants and their activities, such as what types of stores can be opened nearby or what neighboring stores can sell.

The Competition Bureau said these clauses, which are widely used in the retail industry, distort competition in goods.

The bureau says the deal with Empire means the competitor can move forward with plans to open a second grocery store in Crowsnest Pass.

“Market power – not property controls – must decide where and when new grocery stores can be opened in communities across Canada. The removal of these building controls from Crowsnest Pass will allow for more competition in the grocery industry to benefit its residents,” competition commissioner Matthew Boswell said in a statement.

Empire did not respond to a request for comment.

Empire is the parent company of Sobeys Inc., which operates 1,600 stores across Canada under several banners including Sobeys, Safeway, IGA, FreshCo, Foodland, Longos, -Farm Boy, Thrifty Foods, Les Marches Tradition and Marche BoniChoix.

Article content

The bureau has been investigating the use of inventory control facilities by parent companies Loblaws and Sobeys, and said the investigation is ongoing.

Recent amendments to the Competition Act have given the office more powers to protect and promote competition.

Gary Sands of the Canadian Federation of Independent Grocers said he was pleased to see the office using its new powers to curb the use of property controls, especially in a small town.

“The issue of building control is a major concern in small communities where there is (no) access to other grocery stores,” he said.

“It’s not just bad for competition, it actually affects food security.”

In November, Walmart Canada said it would end its use of anti-competitive goods across the country.

The announcement comes after Loblaw said in October it would end its use of the merchandise if other consumers did the same, and Empire said it would like to see the government force retailers to stop using the merchandise.

Sands said he hopes Thursday’s announcement will send a signal throughout the industry, and perhaps encourage big buyers to make changes without the bureau’s involvement.

“I hope the bureau’s action today will spark a reaction from others in the industry to realize that these restrictive commodity controls are in some cases unnecessary, are barriers to competition, and in some cases actually impact food security for Canadians.”

Share this article on your social network