Are Loblaw and Sobeys playing fair when it comes to competition?

Canada’s Competition Bureau is investigating Loblaw and Sobeys on leases that contain property controls, reports the Toronto Star.

Grocers use property controls to prevent competing stores from setting up a location in the same shopping center.

The investigation comes at a time when Canada is trying to attract more competition in the grocery market in the hopes it would reduce the price of food. Right now, five grocery companies account for about 80% of total sales.

The Competition Bureau has not yet found any evidence of wrongdoing, but investigators believe property controls prevent new grocery companies and independents from landing spots in prime locations. The investigation has focused on property controls in the Halifax area.

The Bureau told a federal court that George Weston Ltd. (which owns Loblaw) and Empire Co. (owners of Sobeys) have a hand in real estate investment trusts that own shopping centers where Loblaws or Sobeys are the anchor tenants in some cases.

Ottawa lawmakers want to eliminate property controls in the grocery sector and have been working on changes to competition rules.  

Empire said property controls are not anti-competitive.

Canada has been trying to lure international grocery companies to try and beef up competition, but some have been discouraged by the lack of prime real estate.

Related:Sobeys battles to capture cautious Canadian consumers

Neither Loblaw nor Empire responded to a request for comment in time for publication.