February 22nd, 2024

Competition Bureau investigating use of restrictive property clauses in grocery

By The Canadian Press on February 8, 2024.

The Competition Bureau says it’s investigating the use of property controls in the grocery sector. A worker pushes a cart inside a grocery store in Toronto, Tuesday, July 18, 2023.THE CANADIAN PRESS/Cole Burston

OTTAWA – The Competition Bureau says it’s investigating the use of restrictive real estate clauses in the Canadian grocery sector.

Deputy commissioner Anthony Durocher told a House of Commons committee studying food prices that these measures, often called “property controls,” can be a major barrier to entry and expansion in the Canadian marketplace.

In the Bureau’s June 2023 report on competition in grocery it described property controls as clauses added to a lease or deed that limit how real estate can be used by competitors.

This can include limiting the kinds of stores that can open in a mall, or limiting the kind of store that’s allowed to open in that location after a tenant leaves the property.

For example, if a grocery store is moving to a nearby location, the property control clause could prevent a competitor from entering the old store.

The Bureau’s report recommended that governments limit use of the clauses in the sector, saying they make it harder for new supermarkets to open, and can curb competition.

This report by The Canadian Press was first published Feb. 8, 2024.

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