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Industry NewsCompetition Bureau investigating Loblaw, Sobeys for alleged anti-competitive conduct

Competition Bureau investigating Loblaw, Sobeys for alleged anti-competitive conduct

The Competition Bureau has launched investigations into the parent companies of grocery chains Loblaws and Sobeys, Loblaw Companies and Empire Companies, for alleged anti-competitive conduct, according to court documents.

The Federal Court documents show the commissioner of competition launched the probes on March 1, saying there’s reason to believe the firms’ use of so-called property controls limits retail grocery competition. The commissioner claims in reports that the controls the grocery giants have baked into lease agreements are designed to restrict other potential tenants and their activities and are hampering competition in the grocery market.

The property controls, the commissioner says, may give the companies “the ability to exclude actual or potential competitors from selling food products within certain geographic areas or to dictate the terms upon which they carry on business.”

Earlier this year, the federal government in Ottawa said that it is considering allowing foreign grocery store chains into the Canadian market to strengthen competition. More recently, Loblaw agreed to sign an Grocery Code of Conduct if all grocery retailers signed on.

In a CBC report, Sobeys owner Empire has pushed back against the investigation, saying in a separate court application that the probe gave the commissioner “the appearance of a lack of independence” amid public criticism from federal politicians over grocery pricing and retailers’ conduct.

In the same report, CBC notes Loblaws’ parent company is co-operating with the bureau’s review, noted spokeswoman Catherine Thomas on behalf of George Weston Ltd.

“Restrictive covenants are very common in many industries, including retail. They help support property development investments, encouraging opening of new stores and capital risk-taking,” she said.

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