The competition watchdog has called for more powers to fine supermarkets for unlawfully stopping rivals from opening nearby stores, after discovering Tesco had been doing so for up to a decade.
Tesco has now committed to put an end to these anti-competitive restrictions, after the Competition and Markets Authority (CMA) intervened.
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 is unlawful under the Groceries Market Investigation (Controlled Land) Order 2010, it said.
CMA executive director, markets and mergers, Andrea Gomes da Silva, 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.”
The CMA is also writing to all other supermarkets bound by the Order (The Co-op, Waitrose, Sainsbury’s, Asda, Morrisons, and M&S), asking them to show that their land agreements are not in breach. If any supermarket is not compliant, the CMA said it would consider taking enforcement action.
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 said it would monitor Tesco’s progress and may take formal enforcement action if further breaches are found.