// Sainsbury’s and Asda have come under fire for using “unlawful anti-competitive land agreements”
// The CMA’s executive director for markets and mergers David Stewart said: “Restrictions of this nature are against the law, cause real harm to shoppers and will not be tolerated”
Sainsbury’s and Asda have been ordered to stop using “unlawful anti-competitive land agreements” that prevent rival grocery retailers from opening shops nearby their own.
According to the Competition and Markets Authority (CMA), the property restrictions may have limited shoppers’ choices in terms of groceries and access to lower priced goods.
The agreements include imposing restrictions on land owned by the supermarkets from being used by their competitors.
The breaches also include implementing restrictions of five years or more that prevent landlords from allowing rival shops on land within the same block as an already existing supermarket.
The CMA found that Sainsbury’s had breached anti-competition rules 18 times between 2011 and 2019.
Meanwhile, Asda broke the rules 14 times over the same time period.
Sainsbury’s has now agreed to remove its outstanding restrictions to be compliant with the rules, while the restrictions found within Asda’s land agreements have already been removed.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
According to the CMA, the competition watchdog ensures supermarkets “compete freely” so customers have more choice, a wider range of groceries and lower prices.
The CMA’s executive director for markets and mergers David Stewart said: “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.”
The CMA issued a competition probe into the grocery sector last month following allegations that supermarkets were profiteering from the cost-of-living crisis.
The investigation is looking at “whether any failure in competition is contributing to grocery prices being higher they would be in a well-functioning market”.
“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,” Stewart added.
“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.”
The news comes after Which? reported Tesco to the CMA over its failure to provide detailed pricing information on its loyalty card offers, which it said “could be breaking the law”.
Click here to sign up to Retail Gazette‘s free daily email newsletter
