The Competition and Markets Authority (CMA) announced today that it had secured agreements from Sainsbury’s and Asda to stop using “unlawful anti-competitive” land agreements.
The agreements include placing restrictions on land they own from being used by a rival supermarket, or imposing restrictions lasting five years or more that stop landlords from allowing competing stores on land in the same block as an existing supermarket.
The regulator found that the second and third largest supermarket retailers in the UK’s breached the Groceries Market Investigation (Controlled Land) Order 2010, which was brought in to stop businesses imposing new restrictions that prevent rivals from opening competing stores nearby.
By ensuring supermarkets compete freely, the CMA stated that shoppers have more choice and so benefit from a wider range of groceries and access to cheaper prices.
The CMA found that Sainsbury’s breached the Order 18 times between 2011 and 2019, whilst Asda breached it 14 times between 2011 and 2019
Sainsbury’s has now agreed to remove the outstanding restrictions the CMA identified from its land agreements to become compliant with the Order. The restrictions identified within Asda’s land agreements have now been removed. The CMA has written to both parties outlining the breaches and the action agreed to prevent further breaches.
The regulator took action on similar breaches of the same rules by Tesco in 2020 for 23 breaches and Waitrose in 2022 for seven breaches.
“Restrictions of this nature are against the law, cause real harm to shoppers and will not be tolerated. This is particularly important at a time when many families are struggling to pay their weekly grocery bills,” said David Stewart, Executive Director, Markets and Mergers at the CMA.
“With families under increasing pressure, it is even more critical that competition between supermarkets is helping people to get the best deal.”
The CMA is currently undertaking a separate investigation to assess whether any failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market.
Stewart added: “This enforcement action today is part of our wider action to tackle the cost of living and ensure that families really benefit from more competition. We recently stepped up our work to assess whether any failure in competition is contributing to grocery prices being higher, and we will be updating on this next month.”
NAM Implications:
- Inevitable changes required…
- …that need to be implemented speedily in order to limit damage in the eyes of consumers.
- A pointer for all land-bank holding retailers to anticipate the inevitable?
