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Sainsbury's and Asda agree to address more than 30
anti-competitive land agreements which prevent rivals opening
nearby
The Competition and Markets Authority (CMA) has taken action to
protect supermarket shoppers by securing agreements from
Sainsbury’s and Asda to stop using unlawful anti-competitive land
agreements. These unlawful 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 CMA found that the retail giants, who respectively hold the
second and third highest market shares in the
UK’s £188.1bn supermarket
industry, breached the Groceries Market Investigation (Controlled
Land) Order 2010, which was brought in to stop supermarkets
imposing new restrictions that stop rivals from opening competing
stores nearby. By ensuring supermarkets compete freely, the CMA
is ensuring that shoppers have more choice and so benefit from a
wider range of groceries and access to cheaper prices – which is
even more important as the cost of living rises.
The CMA found that:
· Sainsbury’s breached the
Order 18 times between 2011 and 2019
· Asda breached the Order 14
times between 2011 and 2019
Sainsbury’s has 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.
, Executive Director, Markets
and Mergers at the CMAsaid:
““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.
“With families under increasing pressure, it is even more
critical that competition between supermarkets is helping people
to get the best deal.
“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.”
Today’s action is part of a specific programme of activity by the
CMA to enforce the Order’s rules on land agreements, and thereby
protect competition between businesses and keep prices down for
supermarket customers. This includes action on similar breaches
of the same rules byTesco in 2020 for 23
breaches and Waitrose in 2022 for 7
breaches.
The CMA is currently undertaking a separate piece of work to
assess whether any failure in competition is contributing to
grocery prices being higher than they would be in a
well-functioning market. At this stage the CMA has not seen
evidence pointing to specific new competition concerns in the
grocery sector, but it is important to be sure that weak
competition is not adding to the cost of living.
Notes to editors:
1.
For more information about the limits on large grocery retailers’
ability to prevent land being used by their competitors for
grocery retailing in the future, please read: Groceries Market
Investigation (Controlled Land) Order 2010 and the
CMA’s guidance on Land
Agreements.
2.
The Order banned new restrictive covenants, which prohibit land
from being used for a supermarket, when it came into force in
2010.
3.
The Order also banned Exclusivity Arrangements (which prevent
landlords from allowing competing stores in the same block as an
existing supermarket) which were over 5 years long.
4.
There are 7 designated large grocery retailers that the order
currently applies to: Tesco plc; J Sainsbury plc; Wm Morrison
Supermarkets plc; Asda Stores plc; Co-operative Group Limited;
Waitrose Limited; Marks and Spencer plc.
5.
The CMA’s letters sent to Asda and Sainsbury’s are
publicly available and set out the CMA’s responses to their
respective reported breaches.
6.
The CMA’s assessment of land deals by other supermarkets covered
by the Order is ongoing.
7.
While the CMA does not currently have the power to fine those who
breach the Order, it expects that the Digital Markets,
Competition and Consumers Bill, which is currently in Parliament,
to provide it with this power in the future.
