Competition Bureau Reaches Consent Agreement with Empire Company Limited Regarding Grocery Property Controls

Introduction

On September 22, 2026, the Competition Bureau (Bureau) announced it had entered into a consent agreement with Empire Company Limited (Empire) — the parent of several Canadian grocery banners such as Sobeys, Farm Boy, Safeway, IGA, Foodland, FreshCo, Marché Bonichoix, and Les Marchés Tradition — restricting Empire’s ability to enter into or enforce property controls.

The consent agreement prohibits Empire from enforcing certain restrictive covenants and limits its ability to enter into agreements that restrict the use of nearby retail properties for the sale of groceries. The consent agreement has been entered into notwithstanding Empire’s voluntary public commitments in July 2026 with respect to its use of property controls, and has been described by the Bureau as formalizing those measures.

This development underscores the Bureau’s continuing interest in property controls and demonstrates that the Bureau may continue to investigate a party’s conduct despite public commitments to take steps to address the Bureau’s concerns. The Bureau has confirmed that its investigation into the use of property controls by other grocers remains ongoing, and it “continues to monitor the industry closely.”

Terms of the Consent Agreement

The consent agreement restricts Empire from entering into the following types of agreements:

• Restrictive Covenants. Empire must not enter into or enforce restrictive covenants that directly or indirectly limit or restrict the use of property relating to the sale of one or more grocery food products (i.e., foods or beverages for human consumption).
• Exclusivity Clauses. Empire must not enter into a lease or ancillary document with a landlord that directly limits or restricts, or has the effect of limiting or restricting, the use of retail real estate for either (1) the sale of grocery food products in 19 local areas (covering 6 provinces) identified in the consent agreement, or (2) retailers that do not sell a full assortment of grocery food products (“specialty food retailers,” including bakeries, butchers, pharmacies, dollar stores and convenience stores).
• Radius Clauses. Empire must not enter into an exclusivity clause that restricts or limits the sale of grocery food products outside of the boundaries of the property or development that is the subject of the exclusivity clause (e.g., Empire cannot enter into an exclusivity clause that protects its investment in a property that also prevents the counterparty from leasing retail space to another grocer at a location across the street, in the same municipality, or elsewhere).

Key Takeaways for Businesses

The Empire consent agreement signals a significant development in the Bureau’s enforcement of property controls in commercial real estate.

• The Bureau remains focused on competition in the grocery industry. The consent agreement demonstrates the Bureau’s continued focus on the grocery industry, as evidenced by its ongoing examination into competition in Canada’s food supply chain announced earlier this year. For additional information on the Bureau’s examination, see our Blakes Bulletin: Competition Bureau Launches Examination on Competition in Canada’s Food Supply Chain.
• Heightened scrutiny of property controls is likely to continue. Retailers and commercial landlords who are party to restrictive covenants or exclusivity clauses (including outside of the grocery industry) should anticipate continued regulatory attention and should proactively review their existing agreement portfolios to identify relevant property controls.
• Identifying anticompetitive property controls is fact-dependent. Whether a property control is likely to prevent or lessen competition substantially will be an important consideration. The competition law assessment is therefore highly fact-dependent, and parties that may have market power should exercise caution.
• Proactive and strategic engagement with the Bureau is important. As the Bureau’s enforcement approach continues to evolve, effective engagement can play a significant role in shaping outcomes, informing remedies and providing greater certainty for businesses navigating competition law risks.

For more information, please do not hesitate to contact your usual Blakes contact or any member of the Blakes Competition, Antitrust & Foreign Investment group.