Manitoba asks Sobeys to scrap property restrictions near its stores or it’ll go to municipal board

Manitoba is down to one grocery giant still using property restrictions to keep potential competitors away from its stores after the province curbed the practice through legislation it passed last year.

Now, the province is asking that chain, Sobeys Capital Incorporated, to reconsider.

In a letter to the company Tuesday, Minister of Public Service Delivery Mintu Sandhu asked to meet with Sobeys CEO Pierre St-Laurent “should you wish to discuss removing these controls.”

Otherwise, Sandhu wrote, his office would refer the matter this spring to the municipal board, which would determine whether the targeted property controls — known as restrictive covenants and exclusivity clauses — are contrary to the public interest.

Sandhu believes they are.

“When supermarkets register property controls, they restrict competition that would otherwise help keep food prices affordable. The cost of living remains a top concern for Manitobans, and open, fair competition in the grocery sector is essential to supporting affordable access to food,” Sandhu wrote in the letter.

Sobeys registered 43 property controls

The Manitoba government passed a law last year barring grocery stores from preventing competitors from opening nearby. Businesses could continue to exercise their restrictions if they register within 180 days of the law’s passing.

Twenty controls that could have been registered were abandoned by the December 2025 deadline, while 43 were recorded.

The new law allows the province to challenge any of the registered deals and refer the matter to the municipal board for a hearing.

The remaining 43 agreements, across 25 locations in Manitoba, all belong to Sobeys.

“I’m a reasonable minister, and my government is a reasonable government, and what we want to give is Sobeys another chance to look at those property controls” and consider removing them, Sandhu said in an interview.

The NDP government has argued opening up the market for more grocers, including independent businesses, can bring food prices down. 

The 43 property controls encompass Sobeys, Safeway, FreshCo and IGA locations in Winnipeg, Brandon, Steinbach, Portage la Prairie, Altona and Birds Hill, according to a list provided to CBC News that doesn’t detail what the restrictions involve.

Some stores have multiple real estate deals, including the four agreements connected to the Sobeys in Steinbach. In that case, Sobeys owns multiple properties in the area, Sandhu said.

The other remaining agreements include a south Brandon building Sobeys vacated in 2017 when it moved out and into a new location across the street. Sobeys has signed a lease on the 42,000-square-foot property until 2028.

The company also recorded property controls around 915 Leila Ave. and 1440 Henderson Hwy. in Winnipeg, where no grocery stores exist, alhough there’s a Safeway near the latter property, at 1441 Henderson.

Sobeys didn’t respond to a request for comment.

Mike von Massow, a food economist at the University of Guelph, hasn’t spoken with Sobeys official but suggested the grocery giant might be “standing on principle here.”

Removing some property controls could be an admission grocery prices have been affected, which Sobeys might disagree with, said von Massow, who grew up in Manitoba.

He previously told CBC News he doesn’t believe removing property controls will lower grocery prices. Competitors who could move in — independent grocers and other small-footprint retailers such as Dollarama — cannot compete with big-box stores on breadth of product and price, he said. The food economist added that there often isn’t space for a big-box store anyway.

However, von Massow said in an interview Wednesday the big retailers might worry their customers are shopping around.

“With food prices higher, people are more willing to invest the time to go shopping in other stores, and the closer it is, the easier that is to do,” he said.

If that happens, a store like Sobeys could reduce prices or perhaps even raise prices to compensate for smaller basket sizes, von Massow said.