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Pangenome graphs offer a compact and comprehensive representation of genomic diversity, improving tasks such as variant calling, genotyping, and other downstream analyses. Although the underlying graph structures scale sublinearly with the number of haplotypes, the widely used GFA file format suffers from rapidly growing file sizes due to the explicit and repetitive encoding of haplotype paths. In this work, we introduce an extension to the GFA format that enables efficient grammar-based compression of haplotype paths while retaining human readability. In addition, grammar-based encoding provides an efficient in-memory data structure that does not require decompression, but conversely improves the runtime of many computational tasks that involve haplotype comparisons. We present sqz, a method that makes use of the proposed format extension to encode haplotype paths using byte pair encoding, a grammar-based compression scheme. We evaluate sqz on recent human pangenome graphs from Heumos et al. and the Human Pangenome Reference Consortium (HPRC), comparing it to existing compressors bgzip, gbz, and sequitur. sqz scales sublinearly with the number of haplotypes in a pangenome graph and consistently achieves higher compression ratios than sequitur and up to 5 times better compression than bgzip in HPRC graphs and up to 10 times in the graph from Heumos et al.. When combined with bgzip, sqz matches or excels the compression ratio of gbz across all our datasets. These results demonstrate the potential of our proposed extension of the GFA format in reducing haplotype path redundancy and improving storage efficiency for pangenome graphs.