Empire Company Ltd. has agreed to stop enforcing restrictive property clauses that the Competition Bureau says can limit grocery competition in communities across Canada.The owner of Sobeys, Safeway, Farm Boy, IGA, Foodland and FreshCo reached a Consent Agreement with the Competition Bureau covering restrictive covenants and exclusivity clauses used in commercial real estate agreements.“The Competition Bureau has reached an agreement with Empire to address concerns related to its property controls in the Canadian grocery industry,” the agency said. “Empire has agreed to formalize these measures through a Consent Agreement with the Competition Tribunal.”Blacklock's Reporter said under the agreement, Empire will not enforce existing restrictive covenants, enter into new ones or ask others to establish restrictive covenants benefiting the company. It will also limit its use of exclusivity clauses.The restrictions will remain in place for at least 10 years and apply to specified markets in Alberta, Ontario, Québec, New Brunswick, Nova Scotia and Newfoundland and Labrador.“Consent Agreements registered with the Tribunal are legally binding and enforceable,” said the Competition Bureau. “They have the force and effect of a court order.”The agreement follows a Competition Bureau investigation into whether Empire's property controls prevented rival grocers from obtaining suitable locations near its stores.Competition Bureau counsel Luc Zara said in a Federal Court affidavit filed June 5 that investigators examined “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.”Investigators said suitable locations for grocery stores can be difficult to find in some Canadian communities.“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.”The Bureau alleged Empire, including through its commercial real estate subsidiary ECL Developments Ltd., used clauses in shopping centre agreements that restricted landlords' ability to lease space to competing grocers.“Empire Company Ltd. has engaged, and is engaging, in anti-competitive conduct by controlling available real estate through the use of property controls,” the Bureau alleged in court documents.“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.”.Empire did not admit wrongdoing as part of the settlement and specifically denied admitting any violation of the Competition Act.Other major retailers have already moved away from the practice. Walmart Canada suspended its use of property controls in 2024, while Loblaw Companies Ltd. followed in 2025.The Competition Bureau said restrictive property controls can raise competition concerns beyond the grocery business and urged companies across Canada to review their practices.
