Empire Co. has agreed to stop using restrictive covenants that prevent competing grocers from opening at or near former Empire-owned locations, a move welcomed by Edmonton Coun. Michael Janz. The Competition Bureau announced the agreement on Tuesday. Empire is the parent company of Sobeys, Safeway and FreshCo.

The agreement, registered with the Competition Tribunal, also places limits on Empire’s use of exclusivity clauses. Those clauses prevent landlords from leasing space to competing grocery retailers. The covenants in question could continue to restrict competitors even after Empire sold a property.

Edmonton city council passed a motion earlier this year from Janz directing the mayor to formally ask Alberta to eliminate such covenants. Janz told CTV News Edmonton on Wednesday: “It’s great to see that the law, in this case, has worked,” he said. “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.”

Janz said the agreement would not change the city’s grocery landscape immediately, in part because it 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,” he 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.”

He also criticized how long it took for Empire to agree to stop using 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.” Janz called the delay “sad.”

The issue has a long history in Edmonton. Former mayor Don Iveson introduced a motion on restrictive covenants in 2013, while he was a city councillor. That was also the year Empire acquired Safeway’s Canadian operations.

Manitoba passed legislation last year to eliminate restrictive covenants that had limited competition among grocers. Alberta’s government has said it is considering similar measures. More than two years ago, the Competition Bureau announced investigations into the parent companies of Loblaws and Sobeys over alleged anti-competitive conduct. Empire called the inquiry “unlawful” at the time.

In a 2023 report, the bureau recommended that the federal government limit restrictive covenants in the grocery sector to encourage competition and make it easier for new stores to open. The agreement with Empire may take years to show an effect in Edmonton, Janz said, and he described it as one of several steps needed. Reporting included files from CTV News Edmonton’s Jeremy Thompson and The Canadian Press.

Based on reporting by CTV News Edmonton.