A welcome step toward increasing competition

At a time when a growing number of Manitobans are struggling to afford food for their families, measures taken by the Kinew government to increase competition in the province’s grocery industry are a welcome step.

The government is using provisions of the Property Controls for Grocery Stores and Supermarkets Act in order to challenge restrictive contracts that Sobeys has with respect to properties at two stores in Winnipeg, one in Steinbach and one here in Brandon. The law permits the removal of such contractual clauses if the Municipal Board deems it to be in the public interest to do so, and this is the first time the new provisions have been applied.

In explaining his government’s reasoning for taking this unprecedented step, Public Service Delivery Minister Mintu Sandhu told reporters on Thursday that “Each and every one of these predatory property controls is against the public interest. When we let companies like Sobeys block competition, it makes it easier for them to raise prices.” Those comments are supported by Premier Wab Kinew, who says “We don’t think that that’s in the public interest. I think we all understand that when there’s more competition, there are better prices.”

We agree. Limiting the opportunity for consumers to find a better bargain for their food is never in the public interest, and the action taken by the government this week is long overdue. The former Sobeys location on 18th Street South in Brandon has sat unused for years. If that property can be occupied by another grocery retailer — and increase retail grocery choices in the city as a consequence — all Brandonites will benefit.

On that point, we note that it was also reported this week that the former Sobeys on Burrows Avenue in Winnipeg, which has sat vacant since 2016, will soon reopen as a FreshCo grocery store. The report also reveals that FreshCo is consistently ranked by GroceryPulse.ca as one of the cheapest grocery chains in Canada and is owned by the same corporation as Sobeys. Those facts lead to an obvious question: If Sobeys has a more affordable “sister store” brand, and that chain is willing to open a store in a former Sobeys location in Winnipeg, why hasn’t that also happened in Brandon?

With its low per capita income level, Brandonites would certainly welcome a more affordable grocery option — a conclusion made all the more compelling by the fact that GroceryPulse.ca ranks Safeway, Sobeys and Real Canadian Superstore as the three most expensive grocery chains in all of Canada.

The fact that Sobeys, Safeway and FreshCo are all owned by the same company, Empire Co. Ltd., is proof of the absence of genuine competition in Canada’s grocery industry, and of the likelihood that Canadians are paying more money for their food than they would be shelling out in a more competitive retail environment. Viewed from the perspective, the fact that Empire Co. has allowed its former Sobeys location in Brandon to remain vacant instead of having it occupied by its lower-cost FreshCo brand is discouraging, if not abusive and anti-competitive.

Perhaps the situation will change, in light of the new provincial law and the government’s eagerness to enforce it. And perhaps the Municipal Board will use that law to void the restrictive clauses that are apparently keeping the former Brandon Sobeys store shuttered, potentially opening the way for another grocery store brand to operate at that location. Or maybe Sobeys will avoid such intervention by the Municipal Board and repeat the example it has set at its Burrows Avenue location in Winnipeg, by establishing a FreshCo at the former Sobeys location here in Brandon. Under either scenario, competition among grocers would increase in the city, and Brandon consumers would be the beneficiaries.

The Kinew government deserves credit for its efforts to increase competition within the province’s grocery industry and lower food costs for Manitobans. It is unfortunate, however, that such efforts are even necessary. We encourage Sobeys and Manitoba’s other grocery retailers to be better corporate citizens, by abandoning their restrictive contracts, embracing competition and doing a better job of serving the needs of the customers they claim to care about.