Asda and Sainsbury’s rapped by regulator over ‘unlawful’ land deals

The Competition and Markets Authority (CMA) says it has taken action to protect shoppers by securing pledges from Sainsbury’s and Leeds-headquartered Asda to stop using “unlawful anti-competitive land agreements.”

These 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 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 says it is ensuring shoppers have more choice and so benefit from a wider range of groceries and access to cheaper prices.

The CMA found:

• 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.

David Stewart, executive director, Markets and Mergers at the CMA 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.

“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.”