Further to the March 2014 Consent Agreement (the "Agreement") entered into with Loblaw Companies Limited ("Loblaw") in connection with its $12.4 billion acquisition of Shoppers Drug Mart Corporation ("Shoppers"), the Competition Bureau (the "Bureau") has approved the sale of 13 Loblaw-owned stores and pharmacies to Metro Inc., Remedy's Rx and the Jean Coutu Group.
Under the terms of the divestiture, Loblaw will licence nine pharmacies located in Loblaw-owned grocery stores to Remedy's Rx. These pharmacies are located in Newfoundland and Labrador (two pharmacies) and rural Ontario (seven pharmacies).
Additionally, Loblaw will divest two "No Frills" grocery stores to Metro Inc. (both in Ontario) and two "Shoppers Drug Mart" pharmacies to the Jean Coutu Group (both in New Brunswick).
According to the Bureau's press release discussing its review of Loblaw's acquisition of Shoppers, the competition concerns in those four markets related to the sale of pharmacy products within the grocery store (e.g., prescription medications and over-the-counter drugs), as well as drugstore-type merchandise, such as health and beauty aids (e.g., shampoo, facial tissues and make-up), household items (e.g., cleaning products) and certain food products (e.g., milk, eggs and cookies), all of which are typically sold at both Loblaws and Shoppers Drug Mart stores.
Bureau Continuing to Investigate Loblaw's Relationships with Suppliers
While these divestitures address the competition concerns associated with the Loblaws/Shoppers merger, the Bureau has indicated that the Civil Matters Branch is investigating various Loblaw policies and conduct related to pricing strategies and programs with suppliers that reference rivals' prices. The ongoing civil investigation indicates that the Bureau has additional concerns unrelated to the merger regarding the potential competitive impact of certain trade terms imposed by Loblaw on its suppliers.
For a copy of the Bureau's press release, please click here.
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