(Alliance News) - The Competition & Markets Authority on Friday said it is asking all UK supermarkets to show that their land agreement are not in breach, after finding Tesco PLC has been unlawfully stopping rivals from opening shops near its stores.
The monopoly regulator said it is writing to all other supermarkets, under a Groceries Market Investigation (Controlled Land) Order 2010, to show that their land agreements are not in breach.
CMA said supermarkets bound by the order include J Sainsbury's PLC, WM Morrison Supermarkets PLC, M&S Group PLC, Waitrose, Walmart Inc's Asda and the Co-op Group Ltd
"If any supermarket is not compliant, the CMA will consider taking enforcement action," the regulator said.
The CMA first discovered that Tesco had been preventing landlords from letting property to other supermarkets during monitoring in 2018.
"This may have reduced competition and so lowered choice which leaves shoppers worse off, and is unlawful under the Groceries Market Investigation (Controlled Land) Order 2010," the regulator said.
After this initial discovery, Tesco reviewed all of its land agreements, finding 23 breaches in total. The supermarket has now agreed to take remedial action for all affected land agreements and improve its internal processes and staff training to avoid future breaches and ensure that all new land agreements are in line with the Order.
Andrea Gomes da Silva, executive director of Markets & Mergers at 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," da Silva said.
The 2010 land order banned new restrictive clauses when it came into force in 2010. Tesco had introduced three of these since the order came in force.
The order also banned exclusivity arrangements, which prevent landlords from allowing competing convenience stores in the same block as an existing convenience store, which were over 5 years long. Tesco had 20 of these in place which were over 5 years, according to CMA.
Tesco shares were up 2.1% on Friday in London at 257.40p each.
By Loreta Juodagalvyte; firstname.lastname@example.org
Copyright 2020 Alliance News Limited. All Rights Reserved.