Tesco rapped for 'unlawfully' preventing rival store openings

14 February 2020, 12:49 | Updated: 14 February 2020, 14:30

Tesco has been accused of stifling competition in the grocery market through efforts, over up to 10 years, to prevent rivals from opening stores near their own.

The Competition and Markets Authority (CMA) said it first approached the country's largest supermarket chain on the issue in 2018 after uncovering evidence it had been stopping landlords from letting property to rivals.

It did this through its own land agreements, it was found, though in a statement Tesco blamed "administrative errors".

The CMA said Tesco uncovered 23 breaches of a 2010 groceries market order when it was asked to review its portfolio.

Its statement said: "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 CMA 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 that their land agreements are not in breach.

"If any supermarket is not compliant, the CMA will consider taking enforcement action."

It was unable to issue a fine because it lacked the power to impose such a penalty under its current remit.

Andrea Gomes da Silva, who heads the markets and mergers division at the CMA, added: "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."

A Tesco spokesperson responded: "We do not use restrictive property agreements.

"However, in a small number of historic cases between 2010-15, administrative errors by former advisers meant that our internal processes were not followed correctly.

"As the CMA recognises, we have worked collaboratively in resolving this, and our voluntary review of 5,354 land deals found isolated issues in just 0.4% of these.

"We have since strengthened our controls and training, and are releasing the affected parties from all non-compliant terms."