VANCOUVER AND TORONTO — Canada's Competition Bureau has launched investigations into the parent companies of grocery chains Loblaws and Sobeys for alleged anticompetitive conduct, court documents reveal, with Sobeys' owner calling the inquiry "unlawful."
Industry minister François-Philippe Champagne has said he’s seeking a foreign grocer to strengthen competition in the Canadian market. "Restrictive covenants are very common in many industries, including retail. They help support property development investments, encouraging opening of new stores and capital risk-taking," she said.
George Weston has a controlling ownership interest of 61.7 per cent in Choice Properties Real Estate Investment Trust, and Loblaw accounted for more than half of Choice Properties’ rental revenue in 2023, the documents say — and Choice Properties and Loblaw have a strategic alliance under which the REIT has agreed to “significant restrictions” limiting “its ability to enter into leases with supermarket tenants other than Loblaw.
The covenants can "leave restrictions or exclusions on competitors that extend beyond ownership of the land, sometimes for decades," the applications say. “This is a novel case,” said Michael Osborne, chair of the Canadian competition practice at law firm Cozen O’Connor. Empire also claims the inquiry was launched for an "improper purpose," claiming the grocery sector has been the subject of an "inordinate" amount of attention from politicians.
The grocers have denied allegations of so-called greedflation, but the government has called on them to take action to stabilize food prices. All three major Canadian grocers have also agreed to participate in an industry-led code of conduct meant to help level the playing field for suppliers and smaller grocery retailers.Seafood chain Red Lobster will ask Canadian court to enforce U.S.
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