Aldi and Lidl could be prevented from using property deals to block rival supermarkets from opening nearby under plans unveiled by the competition watchdog.

The Competition and Markets Authority has provisionally ruled that the discounters should be subject to the same land agreement restrictions already imposed on the UK’s largest supermarket chains.

Under the Groceries Market Investigation (Controlled Land) Order 2010, major grocers are restricted from using measures such as restrictive covenants and exclusivity agreements that can make it harder for competitors to open stores in the same area.

The rules currently apply to Tesco, Sainsbury’s, Asda, Morrisons, Co-op, Marks & Spencer and Waitrose, but Aldi and Lidl have previously been exempt.

When the regulations were introduced, the German-owned chains were classified as “limited assortment discounters” because they stocked a significantly smaller grocery range than traditional supermarkets.

However, the CMA said the retailers had grown significantly and now operated large stores across the country, stocked a full range of groceries and bought directly from suppliers through integrated wholesale operations.

It has therefore provisionally classified Aldi, Lidl GB and Lidl Northern Ireland as ‘Large Grocery Retailers’.

Aldi is now the UK’s fourth-largest grocer while Lidl ranks fifth, following years of rapid expansion that has piled pressure on the traditional supermarket giants.

The watchdog launched its review earlier this year after rivals including Sainsbury’s, Morrisons and Iceland raised concerns over whether the discounters should continue to be exempt from the rules.

CMA executive director of competition enforcement and markets Juliette Enser said the proposals were aimed at giving shoppers greater choice and creating a “level playing field for all major supermarkets”.

Despite the potential restrictions, both Aldi and Lidl insisted the move would not derail their expansion plans.

Aldi said it remained committed to opening hundreds more stores across the UK, while Lidl said any final decision would not affect its growth momentum.

The CMA is seeking views on its provisional decision until 7 September, with a final ruling expected in October.

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