Key Takeaways
- The Competition Bureau of Canada has received expanded Federal Court orders to investigate Empire Company Ltd.’s use of property controls across the country.
- Empire owns Safeway, IGA, FreshCo, Sobeys, and Farm Boy, covering grocery stores in Western Canada, the Maritimes, and Ontario.
- Property controls are contractual restrictions that limit how commercial real estate can be used by others, potentially blocking new grocery entrants.
- The investigation builds on earlier actions, including a 2023 grocery market study, 2024 court orders concerning Halifax, and a 2025 settlement where Empire removed a restrictive control in Crowsnest Pass, Alberta.
- Lack of competition in the grocery sector can lead to higher consumer prices, lower product quality, reduced availability, and less innovation.
- The Bureau will collect records, written information, and oral testimony, and will continue to monitor commitments from other major players such as Loblaw.
- The outcome could reshape how property controls are used in Canadian retail real estate and influence future competition policy in the grocery industry.
Overview of the Expanded Investigation
The Federal Court has issued expanded orders authorizing the Competition Bureau of Canada to broaden its probe into Empire Company Ltd.’s employment of property controls nationwide. Originally, the Bureau’s inquiry was confined to property controls in Halifax, but the new ruling allows investigators to examine the full scope of Empire’s practices across all provinces where it operates. The orders compel the company to produce relevant records, written documentation, and to provide oral testimony that will help the Bureau determine whether these controls impede competition in the retail grocery sector. This development signals a heightened regulatory focus on potential anti‑competitive behaviours embedded in real‑estate agreements that major grocery chains may use to protect their market positions.
Empire Company Ltd. and Its Brand Portfolio
Empire Company Ltd. is the parent corporation behind several well‑known grocery banners: Safeway, IGA, FreshCo, Sobeys, and Farm Boy. Safeway locations are present in British Columbia, Alberta, Saskatchewan, and Manitoba; IGA stores operate in those same provinces plus Ontario; FreshCo outlets are found in British Columbia and Alberta. Sobeys dominates the Maritime provinces, while Farm Boy concentrates its presence in Ontario. Together, these brands give Empire a substantial footprint across Western Canada, central Canada, and the Atlantic region, making the company a pivotal player in the national grocery landscape. The geographic spread of its stores means that any property‑control practices employed by Empire could have wide‑reaching effects on market access for competitors in multiple jurisdictions.
What Are Property Controls and Why They Matter
Property controls are contractual restrictions placed on commercial real estate that dictate how the property may be used by third parties. In the grocery context, they often prevent a rival retailer from opening a store on a site that is subject to such a clause, even if the landlord would otherwise be willing to lease the space. While property controls are a common tool in commercial leasing across Canada, they can become anti‑competitive when they effectively block new entrants from entering a market, thereby preserving the incumbent’s dominance. The Competition Bureau’s June 2023 grocery market study highlighted that such controls can limit competition from new grocers, deny consumers the benefits of lower prices, greater choice, and increased innovation, and ultimately harm overall market efficiency.
Previous Steps in the Investigation
The current expansion follows a series of earlier actions. In June 2024, the Bureau secured two court orders to advance investigations into the use of property controls by the parent companies of Sobeys (Empire) and Loblaw (George Weston Ltd.), specifically concerning practices in Halifax. Prior to that, in January 2025, Empire agreed to remove a property control that had restricted retail grocery competition in Crowsnest Pass, Alberta—a restriction that had been in place since 2017 and left Empire’s IGA as the sole grocery option in that town. The Bureau also noted in June 2025 that it would be monitoring Loblaw’s commitment to eliminating similar controls. These milestones demonstrate a pattern of scrutiny and incremental concessions, setting the stage for the now‑nationwide examination of Empire’s broader property‑control portfolio.
Potential Consequences for Consumers and Market
If the Bureau finds that Empire’s property controls substantially lessen competition, the repercussions could be significant for Canadian consumers. Reduced competition often leads to higher prices, as incumbent firms face less pressure to keep costs low. It can also result in lower product quality and diminished variety, since retailers have fewer incentives to differentiate their offerings or innovate. In markets where a single grocer dominates due to restrictive real‑estate agreements, residents may experience limited access to fresh food options, particularly in smaller communities or rural areas. Moreover, the stifling of new entrants can slow the adoption of innovative retail formats, such as discount models, online‑grocer hybrids, or specialty stores, ultimately decreasing the dynamism of the grocery sector.
Next Steps and Ongoing Monitoring
Under the expanded court orders, the Competition Bureau will now compel Empire to produce a comprehensive set of records, internal communications, and other written information relating to its property‑control practices across Canada. Representatives from the company may also be required to give oral testimony, allowing investigators to probe the intent behind specific clauses and their actual impact on market entry. The Bureau intends to assess not only the existence of these controls but also their geographic scope, the negotiation processes involved, and any evidence of coordinated effect that could hinder competition. Parallel to this, the Bureau will continue to monitor Loblaw’s previously pledged efforts to eliminate comparable restrictions, ensuring that any remedial actions are substantive and durable.
Broader Implications for Retail Grocery Competition in Canada
The investigation underscores a growing regulatory willingness to scrutinize non‑price‑based mechanisms that can entrench market power, particularly in sectors where real‑estate assets are central to competitive strategy. Should the Bureau conclude that Empire’s property controls are anti‑competitive, it could seek remedies ranging from the removal or modification of specific clauses to broader injunctions limiting future use of such restraints. This would not only affect Empire but could also set a precedent for other major grocers and retail chains that rely on similar real‑estate tactics. Ultimately, the outcome may help foster a more open and competitive grocery market, encouraging new entrants, spurring innovation, and delivering tangible benefits to Canadian shoppers in the form of better prices, improved quality, and greater choice.