The Competition and Markets Authority has called on major supermarkets to show they’re not stifling competition after finding Tesco has been unlawfully stopping rivals from opening shops near its stores.
Tesco has now committed to put an end to these anti-competitive restrictions, after the CMA intervened.
The CMA first discovered Tesco had been preventing landlords from letting property to other supermarkets during monitoring in 2018. This may have reduced competition and is unlawful under the Groceries Market Investigation (Controlled Land) Order 2010.
After this initial discovery by the CMA, Tesco reviewed all its land agreements, finding 23 breaches in total.
Tesco has now agreed to take remedial action for all affected land agreements; improve its internal processes and staff training to avoid future breaches and ensure that all new land agreements are in line with the Order. The CMA will monitor Tesco’s progress and may take formal enforcement action if further breaches are found.
The competition watchdog is also writing to all other supermarkets bound by the Order (Waitrose, Sainsbury’s, Asda, Morrisons, M&S and the Co-op), asking them to show their land agreements are not in breach. If any supermarket is not compliant, the CMA will consider taking enforcement action.
Andrea Gomes da Silva, Executive Director, Markets and Mergers at the CMA said: “It’s unacceptable that Tesco had these unlawful restrictions in place for up to a decade. By making it harder for other supermarkets to open stores next to its branches, shoppers could have lost out.
“In the future, we want the ability to fine businesses if we find that they are in breach of our orders. That’s why we’ve called on the Government for more powers.”
Further information, including a full list of the locations of land agreements that were in breach, is available on the CMA’s website.