The CMA, which is investigating the wider sector to check whether shoppers are being ripped off, says the chains were guilty of unlawful behaviour.
Business reporter @SkyNewsBiz
Tuesday 13 June 2023 12:25, UK
The competition regulator says it has taken Sainsbury’s and Asda to task over „unlawful” land agreements that prevent rival chains opening stores nearby.
The Competition and Markets Authority (CMA) said it had found 32 examples where the chains had placed restrictions on land agreements which, it said, was anti-competitive.
The watchdog is already investigating the grocery sector as a whole over fears shoppers may be getting a raw deal at the till amid the cost of living crisis, with food inflation hovering at record levels.
The CMA found that Sainsbury’s and Asda, who respectively hold the second and third highest market shares in the UK, „breached the Groceries Market Investigation (Controlled Land) Order 2010, which was brought in to stop supermarkets imposing new restrictions that stop rivals from opening competing stores nearby.
„By ensuring supermarkets compete freely, the CMA is ensuring that shoppers have more choice and so benefit from a wider range of groceries and access to cheaper prices”, the statement said.
It said that Sainsbury’s was responsible for 18 of the land agreements identified, dating back to between 2011 and 2019.
The CMA said Asda had removed all the offending clauses to comply with its order and that Sainsbury’s had agreed to the move.
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The regulator’s executive director for markets and mergers, David Stewart, added: „Restrictions of this nature are against the law, cause real harm to shoppers and will not be tolerated.”
He added: „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.
„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.”
Sainsbury’s told Sky News that nine of the breaches had been rectified.
A spokesperson said: „We acknowledge the CMA’s comments about the recent review of our land agreements, which identified a small number of instances that we consider to be technical breaches of the Controlled Land Order (CLO).
„They amount to less than 1% of our relevant land agreements to which the CLO applies, which have been made over the course of more than a decade.
„These are minor, unintentional technical breaches and did not impact our ability or that of our competitors to operate or compete in any way.
„We have cooperated fully with the CMA throughout this process and we are now resolving these issues, as well as taking steps to make sure this does not happen again.”