News that a company controlling several major Canadian grocery chains is dropping the use of restrictive covenants that block competitors from setting up shop is being welcomed by at least one Edmonton city councillor. The federal Competition Bureau said Tuesday that Empire Co., the parent company of Sobeys, Safeway and FreshCo, has agreed to stop using restrictive covenants that prevent competitors from opening stores at or near former Empire-owned locations, even after those properties have been sold. A consent agreement registered with the Competition Tribunal will also limit Empire’s use of exclusivity clauses, which prevent landlords from leasing space to competing grocery retailers. Earlier this year, Edmonton city council passed a motion from Coun. Michael Janz directing the mayor to formally ask the province to eliminate such covenants. “It’s great to see that the law, in this case, has worked,” Janz told CTV News Edmonton on Wednesday. “It’s been way too long. It’s galling that it’s been allowed to continue. I hope that 10 years from now we’re going to have more grocery stores and more options in more places.” Last year, Manitoba passed legislation eliminating restrictive covenants that had limited competition among grocers. The Alberta government has said it is already considering similar measures. More than two years ago, the Competition Bureau announced investigations into the parent companies of grocery chains Loblaws and Sobeys over alleged anti-competitive conduct. At the time, Empire called the inquiry “unlawful.” In a 2023 report, the bureau recommended the federal government limit the use of restrictive covenants in the grocery sector to boost competition and make it easier for new stores to open. Restrictive covenants have been a longstanding issue in Edmonton. Former mayor Don Iveson brought forward a motion on the topic in 2013, when he was still a city councillor, the same year Empire acquired Safeway’s Canadian operations. Janz said it is “sad” it took this long for Empire to agree to end the use of the covenants. “Canadians, Albertans and Edmontonians are all struggling with ridiculous grocery prices right now,” he said. “It’s one of the top affordability concerns, and to see these companies hold on until the bitter end to anti-competitive behaviour is galling. It’s a little rich of them to say, ‘We’re going to do this now.’ Well, they have to. They are being forced to do the right thing.” It could take years to see how the city’s grocery landscape changes as a result of the move because the agreement applies only to Empire-owned stores. “It’s not something that happens overnight, but this is something that can happen over the next number of years,” Janz said. “This frees up a number of parcels that might have previously been under restriction, but ultimately, it’s just one small step. There are many other steps that need to be taken.” With files from CTV News Edmonton’s Jeremy Thompson and The Canadian Press
