Federal Court Orders Sobeys Parent to Hand Over Records in Grocery Competition Probe

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A court order centred on commercial leases may sound technical, but its consequences could reach the neighbourhood grocery aisle. On June 22, 2026, the Competition Bureau said it had obtained new Federal Court orders requiring Empire Company Limited—the parent of Sobeys and several other grocery banners—to provide records, written information and oral testimony.

The move expands an investigation that initially focused on property controls in the Halifax Regional Municipality into a broader examination of Empire’s practices across Canada. The Bureau is assessing whether restrictions tied to commercial real estate have made it harder for rival grocers to open or compete. It has emphasized that the investigation is ongoing and that no conclusion of wrongdoing has been reached.

The Investigation Has Become National

The Bureau’s first publicly announced court orders in this matter arrived in June 2024. Those orders sought information from Empire and George Weston Limited, the parent of Loblaw, with the initial focus placed on property controls in the Halifax Regional Municipality. Two years later, the Empire inquiry has widened. The latest orders are intended to help investigators understand the scope of the company’s practices across Canada, including how property controls are negotiated and how they may affect competition in different local markets.

That expansion matters because Empire operates through a large family of recognizable banners, including Sobeys, Safeway, IGA, FreshCo, Foodland and Farm Boy. A national investigation can therefore examine whether similar contractual approaches appear in communities with very different populations, store choices and real-estate conditions. Still, broader scrutiny should not be confused with a finding against the company. The orders give investigators access to information; they do not establish that Empire broke competition law.

A Court Order Is an Evidence-Gathering Tool

Section 11 of the Competition Act allows a judge to issue an order when the Competition Commissioner is conducting an inquiry and a person or company has, or is likely to have, information relevant to it. Depending on the order, the recipient may be required to produce records, submit detailed written answers under oath or provide oral testimony. The law also states that such an order can have effect anywhere in Canada, making it a powerful tool in a national investigation.

That legal distinction is important. The Federal Court has not ruled that Empire’s conduct was anti-competitive; it has authorized compulsory information gathering. The Bureau must still study the documents, answers and testimony, define the relevant local markets and assess whether any restrictions created meaningful barriers for rivals. Its June 22 announcement did not disclose a penalty, settlement or Competition Tribunal case. It explicitly said there is no conclusion of wrongdoing at this stage.

What Property Controls Actually Do

Property controls are restrictions attached to commercial real estate. The Bureau’s guidance focuses on two main forms. An exclusivity clause is usually written into a lease and can stop a landlord from renting nearby space to a competing business or limit the products another tenant may sell. A restrictive covenant is tied more directly to the land and can prevent a buyer or future owner from using a property for a competing type of business.

In practical terms, a shopping plaza could appear to have room for another food retailer while its agreements prevent that space from being used for one. The Bureau considers these controls capable of insulating an incumbent from competition, but it does not say every restriction is automatically unlawful. A narrowly designed clause may sometimes support competition when it is genuinely necessary for a company to make a new investment or enter a market. Investigators therefore look at factors such as duration, geographic reach, product coverage and whether less restrictive alternatives were available.

Why Real Estate Can Decide Who Gets to Compete

A grocery store cannot usually be placed in just any vacant unit. A viable location must be suitable for the retailer’s format, customers, deliveries and operating needs. That is why the Bureau’s guidance asks whether competitors have other feasible commercial sites, whether they would be less effective in those locations and whether existing barriers compound the effect of a property control. A restriction that looks modest on paper can become much more significant when suitable sites are scarce.

Consider a small community with one full-service supermarket and only one realistic property for a second store. If a covenant blocks grocery use at that site, shoppers may technically be free to choose another retailer, but the nearest meaningful alternative could be far away. In a dense city, the same clause may have less impact if several comparable locations are available. This local-market reality helps explain why a national investigation still requires detailed records and testimony rather than a simple count of clauses.

Crowsnest Pass Shows Why the Bureau Is Concerned

The Bureau has already identified one concrete Empire-related example. In January 2025, it announced that Empire had agreed to remove a property control in Crowsnest Pass, Alberta. According to the Bureau, Empire’s IGA was the community’s only grocery store, and a restriction in place since 2017 protected it from competition and ensured it would remain the only store of its kind in the area.

Removing the restriction allowed another grocery competitor to move forward with plans for a second store. For residents, the issue was not an abstract debate over lease wording; it affected whether another place to buy food could enter the community. That potential market opening became possible only after the control was removed. The Crowsnest Pass outcome does not prove that every Empire property control has the same purpose or effect. It does, however, illustrate why investigators want to see how clauses were negotiated, where they apply and whether they limited realistic entry in other markets.

A Concentrated Market Raises the Stakes

The Bureau’s 2023 grocery market study described Canadian food retailing as concentrated, with most sales occurring through five major groups: Loblaw, Sobeys, Metro, Costco and Walmart. Its survey of 1,000 Canadians also showed how routinely households interact with this market. Eighty-one per cent said they bought groceries one to three times a week. Forty-nine per cent reported shopping at Loblaw-operated stores and 28 per cent at Sobeys-operated stores, with respondents able to name more than one retailer.

The scrutiny comes at a sensitive time for household budgets. Statistics Canada reported that food purchased from stores cost 4.3 per cent more in May 2026 than a year earlier, marking the 16th consecutive month in which grocery inflation outpaced headline inflation. That does not mean property controls caused the latest price increases; food prices also respond to supply, weather, transportation and other costs. The competition concern is narrower: fewer realistic store options can weaken pressure on retailers to compete on price, quality, service and selection.

Pressure Is Already Changing Industry Practice

The policy environment around property controls has shifted since the original Halifax-focused investigation. In June 2025, the Bureau said it was monitoring Loblaw’s public commitment to eliminate restrictive covenants and waive or narrow certain exclusivity clauses, including in Halifax and in communities where it operated the only grocery store. Empire’s removal of the Crowsnest Pass restriction provided another example of an existing control being changed after regulatory scrutiny. The Bureau also published final guidance explaining its enforcement approach to such arrangements.

Provincial action has followed as well. Manitoba passed legislation in June 2025 aimed at preventing new grocery property controls and dealing with existing restrictions. These developments do not resolve the national investigation into Empire, but they show that lease language once treated largely as a private commercial matter is now receiving public-policy and enforcement attention. Grocers, landlords, property sellers and developers may all face questions about whether restrictions are necessary, proportionate and compatible with the Competition Act.

What Could Happen Next

The immediate next step is compliance with the Federal Court orders and the Bureau’s review of the information it receives. The new material is expected to help investigators examine how Empire negotiates property controls and evaluate their potential effects in markets across Canada. Because competition analysis is highly fact-specific, a clause that raises concern in a one-store town may not produce the same result in a large urban market with numerous viable sites.

If the Bureau ultimately concludes that a property control meets the legal tests for anti-competitive conduct, its guidance says it may seek an order stopping the clause from being used or enforced, measures designed to restore competition, and, in some circumstances, administrative monetary penalties. Those outcomes are possibilities, not predictions, and the Bureau has not announced a timeline or said what result it expects. For shoppers, the significance of the new orders is therefore less about an immediate change at checkout and more about whether Canada’s competition watchdog can uncover—and remove—real-estate barriers that keep new grocery choices from opening.

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