Canada

Canada’s biggest grocery giants — including Loblaws, Sobeys and Metro — are using property law to control how other grocery stores, dollar stores, pharmacies and gas stations can compete with them, an investigation by CBC’s Marketplace has found.

Property controls are deals made between a land owner and retailer that restrict what kinds of businesses can operate nearby, and what the competitors are able to sell. The terms are negotiated to incentivize the business to open their store on the land.

Known in legal terms as restrictive covenants or exclusivity clauses, property controls are common across industries. In a plaza, for example, they could limit the number of veterinary offices or dental practices. While they aren’t unusual, there is criticism about their use in the grocery sector.

For example, the property control attached to a Sobeys in Winnipeg states no one can sell food on the adjacent land unless Sobeys says so, and that permission can be withheld “unreasonably and arbitrarily.”

Meanwhile, a Metro property control in Waterloo, Ont., restricts what food products a Shoppers Drug Mart can sell in the same plaza and prohibits restaurants with a 50-seat capacity or more from opening within 61 metres of Metro’s store.

Metro and Sobeys have both denied that property controls are a barrier to competition, while Loblaws acknowledged last year that property controls restrict competition, but wouldn’t agree to eliminate all of them unless other major grocery retailers do the same.