Competition Bureau lawyers asking for Sobeys' lease terms with mall owners in Canada
· Toronto Sun
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The parent company of Sobeys is being asked to disclose confidential terms of its leases with mall owners held by the grocery store chain reports Blacklock’s Reporter .
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The request comes from anti-trust lawyers to a federal judge who argue Sobeys operators are breaching the Competition Act by having restrictive clauses in those leases.
“Empire Company Ltd. has engaged, and is engaging, in anti-competitive conduct by controlling available real estate through the use of property controls,” the Competition Bureau wrote to the Federal Court.
The lawyers are seeking terms of leases and real estate holdings in 51 local markets in seven provinces, including Ontario.
Across the country, Empire operates some 1,300 Sobeys, Farm Boy, Safeway, IGA, Foodland and FreshCo grocery stores.
In addition, it has a commercial real estate subsidiary, ECL Developments Limited, and a 41.5% share in Crombie Real Estate Investment Trust with 300 property investments in Canada.
“In certain areas of Canada, a grocery store owned by or affiliated with Empire is either the only seller or one of a small number of sellers of full-line grocery products,” federal lawyers told the Court.
Two-year investigation into Empire’s use of property controls in Canada
In an affidavit, Competition Bureau counsel Luc Zara wrote a two-year probe targeted “Empire’s use of property controls and whether such use has given Empire the ability to exclude actual or potential competitors from selling food products in proximity to Empire’s grocery stores.”
“Based on information obtained by the Competition Bureau, real estate that is suitable and commercially attractive for grocery stores appears limited in various areas of Canada,” said the affidavit.
“Property controls are one factor that significantly impacts the availability of suitable real estate in particular geographic areas.”
In 2024, Walmart Canada announced it was suspending its use of property controls and Loblaw Companies Ltd. did the same in 2025.
The Competition Bureau has heard complaints it failed to support competition by approving 30 years’ worth of mergers in the grocery trade, resulting in Loblaw, Metro Inc. and Empire Co. becoming the three major players in Canada.
“It really grinds my gears,” Bloc Québécois MP Yves Perron (Berthier-Maskinongé, Que.) said to a 2024 hearing of the Commons agriculture committee.
“I am looking at the history of mergers in the grocery industry. What were you doing in the 1990s, the 2000s, 2007, 2017 and so on? There were transactions all through this period. We had 13 Canadian grocery chains and now there are three.”
In a 2023 report, the Competition Bureau partially acknowledged its failure to block mergers.
“Critics would note the Bureau’s focus on local grocery competition has allowed for a slow reduction in the number of grocers across Canada as the industry has consolidated,” said the report. “There is some truth to that.”