Manitoba Government’s Plan to Nix Restrictive Covenants for Grocers Draws Mixed Reviews

The NDP government in Manitoba wants to eliminate restrictive covenants for grocery stores, a legal practice that limits the kinds of stores that can open in the vicinity of a particular company’s location.
In an interview with Muther Zeid, owner of several Foodfare locations in Winnipeg, the legislation is welcome, an opinion supported by the Canadian Federation of Independent Grocers.
The grocer said specific property controls prevented him from having two or three more Foodfare locations in the city, including a former Safeway building that sat empty for five years at the corner of Henderson Highway and Bronx Place. Zeid said any building can be converted into a grocery store, but one that sort of has all the necessities in place is more advantageous for a prospective grocer. Those locations also make it cheaper to open and have fewer up-front costs.
He believes the elimination of restrictive covenants would level the playing field from a convenience standpoint for consumers since it would provide more choices of where to shop for groceries.
But Zeid doesn’t foresee retail prices of groceries dropping as a result.
Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers, believes the Manitoba government’s plan to do away with restrictive covenants in the grocery sector should be applauded.
Removing restrictive covenants is something the federation has recommended to governments across the country, as well as the Competition Bureau, he said.
The bureau’s study of the retail grocery market released in May agreed with the federation’s recommendations.
There are nearly 7,000 independent grocers in Canada, according to Sands, many of which are in rural or remote communities. It’s those locations that the federation is particularly concerned about.