Rhode Island becomes second state to ban grocery clauses that lock rivals out

A new Rhode Island law targets contract terms that can keep a former supermarket location from becoming another food store after a chain leaves.

Here's what to know

As The Guardian reported, Rhode Island became the second state to outlaw grocery restrictive covenants — anti-competitive provisions that can stop a new tenant from selling food at a vacated site for years, and sometimes decades.

In Woonsocket, at least three former grocery properties carry those restrictions, including a Stop & Shop vacated in 2004 and a Walmart abandoned in 2011. In a city of about 45,000 people where just one full-service supermarket remains and 37% of residents are food insecure, it's a big deal.

Jeannine Johansen, a Woonsocket resident who volunteers with Connecting for Children and Families, said the city once offered plenty of grocery options, The Guardian reported. "You had a lot of choice, so you could shop around for good prices."

In places where buying groceries is already difficult, ending the practice could open more room for independent operators to increase competition and improve residents' chances of finding affordable staples closer to home.

More background

Restrictive covenants have drawn little attention for decades, but they can make food deserts even harder to fix. A grocery chain can leave one area, relocate elsewhere, and still keep competitors from turning its old building into a supermarket.

Because buildings already outfitted for grocery use are difficult to replace, that kind of restriction can be especially consequential. Lieutenant Governor Sabina Matos said she ran into the issue while looking for a site for a new grocer in Woonsocket, discovering there was a covenant attached to a former Walmart. "I was in disbelief; I couldn't believe that this was legal," she said, per The Guardian.

Legal challenges have not been easy either. According to The Guardian, Laurie Beyranevand, who heads Vermont Law and Graduate Center's Center for Agriculture and Food Systems, said antitrust plaintiffs may have to "show that there's a monopoly. But if regionally there are still other grocers that are available, it could be a challenge to demonstrate that there's some sort of monopoly that they're holding."

What's being done?

Rhode Island's law, which is part of Matos's Fair Price Grocery Agenda, is designed to prevent new restrictive covenants from being created. Since the ban is not retroactive, existing covenants will remain until they expire.

Comparable bans already exist in Chicago, Washington, D.C., Madison, WI, and all of Washington state. D.C. added 20 grocery stores in the five years after its 2017 ban. Four U.S. senators have indicated interest in a federal ban, requesting that the Federal Trade Commission assess its ability to regulate the grocery industry's use of restrictive covenants.

Mohammed Zameeruddin, owner of Daily Stop, is trying to open a store in Woonsocket and says the price of converting a former Sears has risen far beyond what he expected, though the ban could make similar efforts easier to pursue later, The Guardian reported.

For residents still waiting on more places to shop, even one additional grocery store would make a difference. As Johansen said, "It's big. If they open, it's huge."

Where can I learn more?

Rhode Island's covenant ban is one example of how governments are trying to change the grocery business. The articles here focus on plastic waste at checkout rather than empty store sites:

• California lawmakers approved a total plastic bag ban at grocery stores despite shopper skepticism.

• In the UAE, officials proposed a sweeping single-use plastic ban affecting grocery shoppers nationwide.

• Turkey moved toward stricter single-use plastics rules that could change everyday grocery habits.

• Montgomery County, Maryland, passed a plastic bag ban that will force shoppers to adapt.

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