* Sainsbury's to pay 440 mln stg in business rates
* Asda to pay 340 mln stg
* Aldi to pay 100 mln stg
* Market leader Tesco was first to say will pay tax
* Tesco CEO says move not calculated to damage competition
(Adds Tesco CEO, Co-op, Waitrose comments, updates shares)
By James Davey
LONDON, Dec 3 (Reuters) - Sainsbury's, Asda and Aldi will
forgo UK property tax relief during the pandemic, following
rivals Tesco and Morrisons and taking the total
saved by the government from supermarket groups to 1.74 billion
pounds ($2.34 billion).
Sainsbury's said on Thursday it would now pay 440 million
pounds ($591 million) of so called business rates, while Walmart
owned Asda will pay 340 million pounds and German-owned
Aldi will pay 100 million pounds.
In March, the British government and devolved
administrations exempted all retailers from paying the tax on
their stores for the 2020/21 financial year to help them through
the crisis.
Britain's supermarket groups have seen sales soar during the
pandemic, but have been criticised by lawmakers and media for
paying shareholder dividends while receiving tax relief.
However, on Wednesday, market leader Tesco said it would
repay the 585 million pounds it had claimed because some of the
risks of the crisis were now behind it, and returning the money
was "the right thing to do".
That stance put pressure on rivals to do the same.
Morrisons followed, saying it would pay 274 million pounds.
Sainsbury's said it had performed ahead of expectations,
particularly since the start of the second national lockdown in
England last month.
"With regional restrictions likely to remain in place for
some time, we believe it is now fair and right to forgo the
business rates relief," CEO Simon Roberts said.
Asda CEO Roger Burnley said the group recognised
there were other industries for whom the effects of COVID-19
would be much more long lasting.
Tesco CEO Ken Murphy denied its decision to pay was a
calculated one to damage competitors who do not share its
financial strength.
"When we made the decision, we didn't really think about the
competition at all," he told Sky News.
Murphy also said the move was unconnected to Tesco's plan to
pay shareholders a 5 billion pound special dividend when the
sale of its Asian business was completed.
PRESSURE ON OTHERS
Analysts said the pressure was now on other food retailers
to also forgo the relief.
Discounters Lidl and B&M declined to comment.
The Co-operative Group said it plans to review its
position at year-end. M&S and Waitrose owner, the John
Lewis Partnership, have said they will not forgo it.
A spokesman for British Prime Minister Boris Johnson told
reporters the government welcomed any decision to repay support
"where it is no longer needed".
Taking account of the business rates it will now pay,
Sainsbury's forecast underlying pretax profit of at least 270
million pounds in its 2020-21 year, and over 586 million pounds
in 2021-22.
It will prioritise dividend payments to shareholders over
cutting debt in 2020-21, which will push back its timetable for
debt reduction.
Shares in Sainsbury's were up 4.1% at 1308 GMT. Morrisons
was down 0.3% and Tesco was up 1%.
Sainsbury's also repeated its call for the government to
review the business rates system to create a more level playing
field between physical and online retailers.
($1 = 0.7435 pounds)
(Reporting by James Davey; additional reporting by Liz Piper;
Editing by John Stonestreet and Mark Potter)