Sainsbury’s and Asda caused ‘harm’ with unlawful land deals blocking rivals

Sainsbury’s and Asda used unlawful land agreements to prevent rival supermarkets from opening stores nearby for nearly a decade, the UK’s competition watchdog has found.

The Competition and Markets Authority (CMA) said it was taking enforcement action over the anti-competitive measures which “cause real harm” to shoppers.

It follows similar breaches of the same rules by Tesco and Waitrose in recent years.

The Groceries Market Investigation (Controlled Land) Order (CLO) was brought in in 2010 to stop supermarkets imposing restrictions that stop rivals from opening competing stores nearby.

Britain’s second and third biggest supermarkets collectively breached the order more than 30 times, the CMA found.

It said Sainsbury’s breached the order 18 times between 2011 and 2019, and Asda breached it 14 times over the same period.

Both supermarkets have agreed to address and remove the anti-competitive land agreements.

They also dismissed them as minor “technical” breaches of the order – with Sainsbury’s arguing that it did not limit competitors “in any way”.

But the CMA criticised the retailers for the competition failures during a time that households are facing much higher grocery bills.

“Restrictions of this nature are against the law, cause real harm to shoppers and will not be tolerated,” David Stewart, executive director of markets and mergers at the CMA, said.

“With families under increasing pressure, it is even more critical that competition between supermarkets is helping people to get the best deal.”

Tesco, the UK’s largest supermarket, was rapped in 2020 for leaning on its landlords not to rent nearby sites to rivals for up to a decade.

And last year, Waitrose admitted it signed deals with landlords to prevent new stores being opened on the same block.

The CMA said it is looking deeper into whether such anti-competition measures are contributing to pushing up the price of groceries.

In a statement, Sainsbury’s said it acknowledges breaches of the 2010 order, but said they amount to less than 1% of the relevant leases agreed over the course of more than a decade.

A spokesman said: “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 co-operated 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.”

A spokesman for Asda said: “We have reviewed details of over 1,600 property-related transactions which identified 14 issues.

“All of these relate to legacy transactions that occurred between 2011 and 2019, when Asda was under different ownership, and involve technical errors in documentation that have all been resolved.

“We have also taken action to strengthen our CLO-related training and guidance.”

Asda was formerly owned by US retailer Walmart. It was acquired by the billionaire Issa brothers and TDR Capital in 2021.