CMA hits out at Asda and Sainsbury’s for restricting competition
Asda and Sainsbury’s broke anti-competition rules a combined total of 32 times between 2011 and 2019, the competition watchdog said this morning.
The Competition and Markets Authority (CMA) said the ‘Big Four’ supermarkets broke the Groceries Market Investigation (Controlled Land) Order 2010, which was brought in to stop supermarkets imposing new restrictions that stop rivals from opening competing stores nearby and ensuring shoppers have a fairer choice on prices.
However, it was found that Sainsbury’s breached the order 18 times over the eight year period in sites located across Brighton, London and Wales.
As part of the investigation, Sainsbury’s has now agreed to remove the outstanding restrictions identified from its land agreements.
Nine of the eighteen breaches identified in the review of Sainsbury’s leases have already been rectified.
These are minor, technical breaches
A Sainsbury’s spokesman
A Sainsbury’s spokesperson told City A.M: “We acknowledge the CMA’s comments about the recent review of our land agreements, which identified a small number of instances that we consider to be technical breaches of the Controlled Land Order (CLO). They amount to less than one per cent of our relevant land agreements to which the CLO applies, which have been made over the course of more than a decade.
“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 cooperated 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.”
Asda also breaches the rule across 14 sites across locations such as Scotland and Newcastle – but the restrictions identified within Asda’s land agreements have now been removed.
“Restrictions of this nature are against the law, cause real harm to shoppers and will not be tolerated. This is particularly important at a time when many families are struggling to pay their weekly grocery bills,” David Stewart, executive director, 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.
He added: “This enforcement action today is part of our wider action to tackle the cost of living and ensure that families really benefit from more competition. We recently stepped up our work to assess whether any failure in competition is contributing to grocery prices being higher and we will be updating on this next month.”
In the wake of the cost of living crisis, the CMA is also investigating whether a “failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market”.
Over the past year supermarkets have been forced to raise prices of goods due to the war in Ukraine which has disrupted the food market and impacted the supply chain.
This coupled with soaring inflation in the UK has created a volatile market for shoppers with many feeling a great strain on their personal finances as the struggle to keep up with high food prices.
City A.M has contacted Asda for a comment.