Loblaw, Sobeys owners ordered to hand over info in "anticompetitive conduct" investigation
Canada’s Competition Bureau has obtained two court orders requiring Loblaw’s and Sobeys’ parent companies to hand over information relevant to its investigation into alleged “anticompetitive conduct.”
In a news release on Tuesday, the law enforcement agency that regulates competition in Canada announced the update in its investigation into Loblaw’s parent company, George Weston Limited, and Sobeys, parent company, Empire Company Limited.
The investigation, launched on March 1, is not about food prices as many might expect but about the companies’ use of property controls.
The court orders, which were granted by the federal court, require George Weston and Empire to surrender records about real estate holdings, lease agreements, customer data, and other related records.
We have obtained two court orders to advance our investigations into Sobeys and Loblaws use of property controls in the Canadian grocery industry.
Learn more: https://t.co/o5lvpxgyJb pic.twitter.com/k579lCj7fw
— Competition Bureau Canada (@CompBureau) June 11, 2024
“This information will help determine whether Sobeys and Loblaw are imposing anticompetitive restrictions on the use of real estate, known as property controls, that impact competition in the retail sale of food products,” stated the Competition Bureau.
“This includes examining whether they are restricting or excluding their competitors through exclusivity clauses and restrictive covenants.”
The agency added that there is no conclusion of wrongdoing at this time.
There are two kinds of property controls — exclusivity clauses and restrictive covenants.
Generally found in commercial leases, exclusivity clauses prohibit the landlord from leasing space to another tenant that competes with the existing tenant.
Restrictive covenants are restrictions on land that prevent a buyer or owner of a commercial property from using the location to operate or lease to certain types of businesses.
Essentially, these clauses in lease agreements can prevent other potential grocers from opening in the same plazas, areas or spaces recently vacated by a Loblaws or Sobeys store.
“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,” explained the Competition Bureau.
Daily Hive has requested comment from Loblaw, George Weston, Sobeys, and Empire.
According to the Canadian Press, George Weston has been cooperating with the probe, while Empire fought back against it, saying in a separate application that these types of controls are common across retail and other industries.
Competition Bureau spokeswoman Sarah Brown confirmed with Daily Hive that the bureau had filed a motion to strike Empire’s application for judicial review and that the motion was granted. She says the agency is aware that Empire is appealing the decision.
This news comes after thousands of Canadians participated in a month-long boycott against Loblaw, protesting soaring grocery prices.
With files from blogTO’s Becky Robertson
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