Aldi and Lidl will be subject to the same competition rules as Britain’s biggest supermarkets, following a decision by the Competition and Markets Authority to prevent the discounters from blocking rival stores opening nearby.

The competition watchdog has designated Aldi, Lidl GB and Lidl Northern Ireland as ‘Large Grocery Retailers’ under the Groceries Market Investigation Order 2010.

The decision means the German discounters will face the same restrictions on land agreements as Tesco, Sainsbury’s, Asda, Morrisons, Marks & Spencer, Co-op and Waitrose.

The rules prevent supermarkets from using restrictive covenants and exclusivity agreements that could stop competitors from opening stores in the same area.

Under the changes, Aldi and Lidl will be prohibited from including such restrictions in new agreements, while existing arrangements can be reviewed by the CMA at the request of landowners, developers or rival retailers.

The decision follows a consultation launched in August, when the watchdog proposed bringing the two discount chains under the regulations following their rapid expansion across the UK.

Morrisons, Waitrose and Iceland all backed the proposals, while neither Aldi nor Lidl submitted representations to the CMA.

The discounters were originally excluded from the rules when they were introduced in 2010 because of their smaller product ranges and different operating models.

However, the CMA concluded that their growing store estates, broader grocery offerings and purchasing operations meant they should now be treated in the same way as their larger rivals.

CMA executive director for competition enforcement and markets Juliette Enser said: “This will help level the playing field and make sure shoppers get the best choice of products and prices in their area.”

The decision comes as Aldi and Lidl continue to expand their presence in the UK grocery market, with both now ranking among the country’s five biggest supermarket retailers by market share.

The UK food and grocery market is estimated to be worth £222.7bn, according to figures cited by the watchdog.

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