The Competition Bureau of Canada has called on market participants to share information regarding the use of property controls in the grocery industry.
The request for input comes as the bureau investigates whether grocery retailers’ use of property restrictions is limiting competition and harming consumers.
Property controls can include clauses restricting how a property can be used by others, giving grocery retailers control over existing or potential retail spaces. These controls could prevent competing businesses from opening new stores or limit the sale of certain products. As a result, consumers may experience fewer choices, higher prices, or reduced quality.
The Bureau’s inquiry targets property controls imposed by grocery retailers, particularly focusing on exclusivity clauses and restrictive covenants. Exclusivity clauses are usually part of commercial lease agreements and can limit what a landlord can do with their property, such as preventing leasing to specific grocery competitors or restricting certain product sales within a store. Restrictive covenants, often linked to land sales, may prevent competing retailers from opening stores on certain properties, with some restrictions lasting indefinitely.
The investigation aims to determine whether such practices amount to an abuse of market dominance under the Competition Act. It specifically mentions ongoing probes into Sobeys and Loblaw, two of Canada’s largest grocery chains, but clarifies that no conclusions have been reached regarding wrongdoing.
In a bid to gather relevant data, the bureau is inviting contributions from stakeholders in the food retail and real estate sectors, as well as from domestic and international grocers. Market participants are encouraged to confidentially submit experiences or evidence related to property controls by emailing the bureau. The information provided will be treated confidentially, except under specific circumstances outlined in the agency’s guidelines.
The call for information follows a series of recent developments, including the bureau securing court orders in June to further its investigations into these practices. Additionally, in August, the bureau sought feedback from Canadians on its preliminary enforcement approach to property controls, a separate but related consultation.
For more details or to submit information, market participants can visit the bureau’s website.