Competition Bureau looking deeper into how Sobeys can control who sells food in your area
The Competition Bureau has obtained court orders requiring the parent company of Sobeys to produce documents and testimony for its investigation into property controls, which are agreements that can limit the places where a new grocery store can open.
Competition Bureau looking into how grocer negotiates agreements to restrict competitors
The Competition Bureau of Canada announced Monday that it is moving forward with its investigation into competition in the Canadian grocery store landscape.
The bureau said it obtained orders from the Federal Court requiring the parent company of Sobeys to produce documents and testimony for its investigation into property controls.
Property controls are legal agreements that can block competitors from setting up stores in certain places, limiting where a new grocery store can open.
"Lack of competition in the grocery industry can result in higher prices, lower quality and less availability," the bureau said in a news release.
WATCH | How grocery giants control who can sell food in your neighbourhood:
One reason why you might be paying more for groceries
January 26|
Duration3:15
Why are grocery prices so high? One factor may be property controls — a powerful tool that big groceries can use to block competition and control local markets across Canada. Marketplace breaks down how it works and why it can take a toll on your wallet.
Those who study the industry have raised concerns that a lack of competition can create "food deserts," which are areas where people must travel long distances to buy groceries.
The bureau has been investigating the issue since 2024. It has not made any conclusions of wrongdoing.
A significant part of its work has focused on the Halifax area, but the bureau is also looking at the use of property controls across the country.
The court orders recently obtained by the Competition Bureau apply to Empire Company Limited, the parent company of Sobeys, Farm Boy, Safeway, IGA, Foodland, and FreshCo.
The Competition Bureau said in a statement the new court orders will give it more information about how Empire negotiates property controls and their potential impacts.
Work by CBC's Marketplace and CBC Nova Scotia uncovered examples of agreements for dozens of properties across Canada.
- Decades-old clause keeping grocers out of Halifax neighbourhood hurts community, say residents
- Federal investigation probes grocery store competition in Halifax
Some documents permitted the grocer wide discretion in enforcing property controls, allowing it to "unreasonably or arbitrarily" withhold consent to competition.
An aerial view of a parking lot at a Sobeys grocery store in the Halifax area.(Craig Paisley/CBC)
Some who study the grocery and food industry are uncertain whether the move by the Competition Bureau will truly affect prices for consumers.
"Many of these stores are part of a mall structure, so that comes down to the contracts that they're able to negotiate with the property management company or the mall developer organization," said Stuart Smyth, a professor in the Department of Agricultural and Resource Economics at the University of Saskatchewan.
Smyth added that changing this structure would be a "challenge." He doesn't see any immediate policy moves coming that will stop grocery prices from rising.
"I wish I could tell you they weren't," he said, "But I just don't see any indicators that are going to significantly reverse the consistent upward trend in food prices."
Smyth pointed out much of what Canadians buy and eat depends on importing fresh produce from the U.S., so any relative drop in the Canadian dollar has an impact on food prices.
He does not believe the Carney government's recently announced food security strategy will provide relief to consumers in 2026.
"Optimistically, some of those policies may be able to start having an effect by this time next year," he said. "To me, it's more of a longer term strategy."
CBC News requested comment from Sobeys to discuss the latest move from the Competition Bureau, but did not receive a response by deadline.
The Competition Bureau said Empire has 90 days from when the order was issued to produce records and written returns.
