Sainsbury’s and Asda have come under fire for using “unlawful anti-competitive land agreements” that prevent rival grocery retailers from opening shops nearby their supermarkets.
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.
As a result, both retailers have now been ordered to stop blocking rival stores, which includes removing restrictions on land owned by the big supermarkets from being used by their competitors.
The retailers are also accused of 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.
Subscribe to Grocery Gazette for free
Sign up here to get the latest grocery and food news each morning
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 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.
“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,” the CMA’s executive director for markets and mergers David Stewart said.
“With families under increasing pressure, it is even more critical that competition between supermarkets is helping people to get the best deal.”
The news comes as the CMA issued a competition probe into the grocery sector last month, following allegations that supermarkets were profiteering from the cost-of-living crisis.
“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 CMA had previously found that Waitrose was signing deals with landlords to block other supermarkets from opening nearby. As a result, Waitrose agreed to remove the restrictions from land agreements which had previously prevented rivals from setting up new stores.
