Canada Investigates Major Grocers for Anticompetitive Practices

The Competition Bureau of Canada has initiated an investigation into the country’s largest grocery retailers, including Loblaws (L) and Sobeys’ parent company, Empire Company Ltd (EMP.A), over allegations of anticompetitive conduct.

The federal regulator’s probe focuses on whether these major grocery chains are employing property controls that limit retail grocery competition in both large and small communities across Canada. The specific concern is that these retailers might be using lease agreements to restrict other potential tenants, thereby stifling competition and harming consumer choice.

Earlier this year, the federal government in Ottawa indicated that it is considering the introduction of foreign grocery store chains into the Canadian market as a strategy to boost competition. This move comes in response to escalating food prices, which have surged by double digits in recent years and have been a significant driver of inflation.

Canadian grocery store owners have faced increasing public and political scrutiny over these rising prices, with accusations of price gouging despite their denials. In response to the mounting pressure, Ottawa has urged the grocery giants to stabilize food prices. The situation has also sparked a national boycott of Loblaws stores among consumers frustrated with the high cost of food.

In a bid to address these issues, the major Canadian grocers have agreed to participate in an industry-led code of conduct. This initiative aims to create a fairer playing field for suppliers and independent grocery retailers, promoting healthier competition within the market.

Source: Bay Street