Supermarkets drag heels on CMA review of ‘unlawful’ deals

Major supermarkets have failed to review their land agreements for “anti-competitive” clauses, nine months after authorities began investigating the issue.

“Restrictive covenants”, which have been illegal since 2010, allow former owners to control how plots are developed after being sold. 

The Competition and Markets Authority (CMA) launched an investigation last year after finding Tesco’s land deals had prevented rivals from moving nearby. 

According to The Grocer, the watchdog then wrote to Sainsbury’s, Morrisons, Asda, Marks and Spencer, the Co-op and Waitrose to check they were complying with the ban.

READ MORE: Consortium expects to clear CMA rules for £6.3bn Morrisons deal

The grocery giants were asked to check a sample of their land agreements for any restrictive clauses.

If they have broken competition laws, the supermarkets could be forced to assess every leasehold and freehold agreed in the last 11 years.

However, they have all delayed their reviews until recently, blaming the disruption of the Covid-19 pandemic.

In February 2020, the CMA discovered that Tesco had stopped competitors from opening stores in 23 locations across England and Wales.

“It’s unacceptable that Tesco had these unlawful restrictions in place for up to a decade,” then-CMA executive director Andrea Coscelli said. 

“By making it harder for other supermarkets to open stores next to its branches, shoppers could have lost out.”

It is not just major retailers who have lost out over restrictive covenants.

Noel Davis, head of frozen food retailer Oops, told The Grocer in January that the business had come up against the agreements at a “phenomenal” rate.

Aldi and Lidl are not part of the CMA’s investigation as they were not implicated in the findings which led to the 2010 ban.

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