CMA extends supermarket land agreement rules to Aldi and Lidl in UK grocery market

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CMA extends land rules to Aldi and Lidl

Highlights

Aldi, Lidl GB, and Lidl NI designated as Large Grocery Retailers under the Groceries Market Investigation (Controlled Land) Order 2010 by the CMA.
Inclusion restricts Aldi and Lidl from using exclusivity or restrictive covenants in new land agreements, while allowing existing ones to be reviewed by the CMA.
Aldi and Lidl, two of the UK's top five retailers, now subject to rules covering a £222.7 billion grocery market previously applied to Asda, Tesco, and others.

New designation under grocery land order

As reported by GOV.UK, the Competition and Markets Authority has decided that Aldi, Lidl GB and Lidl NI will be designated as Large Grocery Retailers under the Groceries Market Investigation (Controlled Land) Order 2010.

The order already applies to Asda, Co-op, Marks and Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose. It is intended to prevent large grocery chains from using land agreements, including restrictive covenants and exclusivity arrangements, to make it harder for rival supermarkets to open nearby.

Under the rules, newly designated retailers cannot include prohibited restrictions in new agreements. Existing agreements can also be reviewed by the CMA at the request of interested landowners, developers and rival supermarkets.

Implications for competition and shoppers

In August, the CMA invited views on the proposal, and submissions from Morrisons, Waitrose and Iceland all supported the plan. The regulator says it did not receive representations from Aldi, Lidl GB or Lidl NI.

Juliette Enser, executive director for competition enforcement and markets at the CMA, says the rules are designed to stop major supermarket chains from blocking rival store openings in their areas. She says applying the framework to Aldi and Lidl helps level the playing field and supports better choice of products and prices for shoppers.

The UK food and grocery market is worth an estimated £222.7 billion, and Aldi and Lidl rank among the top five retailers by market share. Their inclusion broadens the reach of a regulatory framework that has been in place for the country’s biggest supermarket groups since 2010.

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