The Competition Bureau advances investigation into Sobeys Inc. and Loblaw Companies Ltd.

GATINEAU — The Competition Bureau says they have obtained two court orders to advance its investigations into Empire Company Limited’s and George Weston Limited’s use of property controls. Empire is the parent company of Sobeys Inc. and George Weston is the parent company of Loblaw Companies Limited.

The orders, granted by the Federal Court, require the companies to produce records and information relevant to the Bureau’s investigations. The investigations are currently focused on assessing the use of property controls in the Halifax Regional Municipality.

This information will reportedly help determine whether Sobeys and Loblaw are imposing anti-competitive restrictions on the use of real estate, known as property controls, that impact competition in the retail sale of food products. This includes examining whether they are restricting or excluding their competitors through exclusivity clauses and restrictive covenants. There is no conclusion of wrongdoing at this time.

Loblaw and Sobeys are the largest full-service grocery chains in Canada, with thousands of stores across multiple banners.

• The investigations are also seeking to determine the nature and extent of property controls in Canada.
• Property controls limit how real estate can be used, including by competing food retailers. They can harm competition by making it difficult, or even impossible, for businesses to open new stores.
• There are two types of property controls: exclusivity clauses and restrictive covenants.
• Exclusivity clauses are generally found in commercial leases. They prohibit the landlord from leasing space to another tenant that competes with the existing tenant.
• Restrictive covenants are restrictions on land that prevent a purchaser or owner of a commercial property from using the location to operate or lease to operators of certain types of businesses.