Listen to this article
Estimated 4 minutes
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
One of Canada’s major grocers has announced a new approach to competition around the land where its stores are located.
Empire Company Limited, the parent company of Sobeys, announced Tuesday it will change the way it uses what are called “property controls.”
These are legal agreements that can block competitors from setting up stores in certain places. Property controls have been used for years and can limit where a new grocery store can open.
Critics have said they can lead to lessened competition and force consumers to travel further to get affordable groceries.
“While these arrangements are not inherently anti-competitive, we recognize the increased scrutiny in this area and the importance of ensuring they are used appropriately,” Empire said in a statement.
Since 2024, the Competition Bureau of Canada has been investigating the use of property controls, and has pursued court orders to force Empire to produce documents and testimony for its investigation. The bureau has made no conclusions of wrongdoing.
The bureau also recommended in 2023 that provinces and territories should take steps to limit or ban property controls in the grocery industry. Manitoba made that move in June 2025.
The Competition Bureau has specifically examined the Halifax Regional Municipality, although the investigation is relevant to the whole country.
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.
“I think it’s a step in the right direction,” said Jenna Khoury-Hanna, an associate lawyer at Kinch Eddie Litigation in Campbellford, Ont.
In 2019 while studying at Dalhousie University’s Schulich School of Law, Khoury-Hanna searched former grocery store locations in Halifax for property controls and published her research.
She found a number of restrictive covenants on old Sobeys locations. That included downtown Halifax’s Gottingen Street and Dartmouth’s Woodside neighbourhood.
“I’m kind of excited to see what new opportunities may now arise from this announcement in terms of other businesses being able to go in those locations that might not have been able to before,” she said.
The grocery industry uses two types of property controls: restrictive covenants and exclusivity clauses.
Restrictive covenants are attached to the land itself.
Empire says it will not make any new restrictive covenants, and it won’t enforce any existing restrictive covenants, including those on properties that were previously sold.
Empire is also limiting its approach to exclusivity clauses.
Exclusivity clauses are attached to long-term leases signed when a store opens. They can be used for purposes like restricting a nearby store from selling a product — such as bread — carried by the major grocer.
Jamie Baxter is an associate professor at Dalhousie’s law school who studies property law and food systems.
He welcomed the commitment by Empire, but noted that there is not a lot of public transparency around property controls, as their enforcement is largely up to an individual property owner.
“I haven’t seen anywhere a more comprehensive listing of those, which I think would go a long way to giving the public, as well as enforcement agencies and others, more knowledge about what is happening,” he said.
The Competition Bureau has said publicly it believes lack of competition can result in higher prices at the grocery store, but it is unclear how Empire’s move will affect the Canadian grocery market for consumers.
“I think it will depend where you are in Canada,” said Pascal Thériault, an agricultural economist at McGill University.
“I think in smaller communities it could be positive, because some of those clauses would even prevent butcheries and bakeries from setting up. But when it comes to actual grocery stores, especially in larger urban areas, it is quite possible that it will be quite a limited impact for consumers.”
Thériault noted that Empire joins Walmart Canada and the parent company of Loblaws, which have already announced plans to move away from property controls.
MORE TOP STORIES
