OTTAWA, ONTARIO--(Marketwired - July 21, 2014) - Competition Bureau

The Competition Bureau announced today that it has approved the sale by Loblaw of two No Frills stores to Metro Inc. and two Shoppers Drug Mart stores to the Jean Coutu Group, as well as the licence of nine pharmacies within a Loblaw store to Remedy's Rx (Remedy's). These transactions are being made under the March 2014 Consent Agreement between Loblaw and the Bureau relating to Loblaw's acquisition of Shoppers Drug Mart. The transactions will preserve competition in the retail sale of pharmacy products and drugstore-type merchandise in Canada.

Under the terms of the Consent Agreement, Loblaw will license to Remedy's a pharmacy within each of the following Loblaw-owned grocery stores:

It will also sell to Metro the following two No Frills stores and to Jean Coutu the following two Shoppers Drug Mart stores:

In those four markets, the competition concerns did not relate only to pharmacy products within the grocery store (e.g. prescription medications and over-the-counter drugs like Acetaminophen), but also to drugstore-type merchandise, including 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 sold in both a Shoppers Drug Mart and a Loblaw.

When conducting its review of Loblaw's acquisition of Shoppers Drug Mart, the Bureau examined the level of retail competition in each and every market where both a Loblaw-owned grocery store and a Shoppers Drug Mart were present. Competition concerns were identified in 27 markets. As part of the Consent Agreement, Loblaw is required to sell the remaining 14 retail stores. That process is ongoing. The stores are to be sold to a new owner that will continue to operate them. The agreement does not permit Loblaw to simply close them.

Competition generally leads to lower prices for consumers, as well as more consumer choice, a wider range of service options and increased innovation.

Quick Facts

• Metro employs over 65,000 people in Quebec and Ontario and operates a network of almost 600 food stores as well as over 250 drugstores.
• The Jean Coutu Group operates a network of 414 franchised stores located in Quebec, New Brunswick and Ontario and employs close to 20,000 people.
• Remedy's operates a retail banner buying group with 275 independent members in six provinces. Remedy's also owns and operates over 25 pharmacy locations across Canada.
• Mergers in Canada are subject to review by the Bureau under the Competition Act to ensure that they will not result in a substantial lessening and/or prevention of competition.
• The merger review process involves collecting information from, and conducting interviews with, a wide range of industry participants, including the parties, suppliers, competitors, customers and industry experts.

Associated Links

Competition Bureau Reaches Consent Agreement in Loblaw/Shoppers Deal

Position Statement: Competition Bureau Review of the Proposed Acquisition of Shoppers Drug Mart Corporation by Loblaw Companies Limited

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The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.