Co-op Admits Unlawful Land Deals Blocking Rival Supermarkets

The Co-operative Group Limited (Co-op), a major UK supermarket chain, has admitted to 107 breaches of the Groceries Market Investigation (Controlled Land) Order 2010. The Competition and Markets Authority (CMA) found that Co-op had entered into unlawful anti-competitive land agreements, preventing rivals from opening competing stores nearby. This admission has significant implications for the competitive landscape in the UK's grocery retail market and potential consequences for consumers.

The unlawful land deals, also known as restrictive covenants and exclusivity arrangements, restrict competition among supermarkets by preventing rivals from opening competing stores nearby. These deals include restrictive covenants that prohibit land from being used for a supermarket and exclusivity arrangements that prevent landlords from allowing competing stores in the same block as an existing supermarket. Co-op admitted to 107 breaches of these orders, including agreements that prevented land from being used for a supermarket.

The CMA's enforcement of the Groceries Market Investigation (Controlled Land) Order 2010 has significantly influenced the behavior of other large grocery retailers, such as Tesco, Sainsbury's, and Asda. The Order was introduced to prevent supermarkets from imposing restrictions that block rivals from opening competing stores nearby, thereby ensuring that shoppers have more choice and access to cheaper prices. The CMA's enforcement actions have led to these retailers addressing their breaches and complying with the Order's rules.

Tesco admitted to 23 breaches of the Order in 2020 and agreed to remove the restrictions identified by the CMA from its land agreements to become compliant. Sainsbury's admitted to 18 breaches of the Order between 2011 and 2019 and agreed to remove the outstanding restrictions from its land agreements to comply with the Order. Asda admitted to 14 breaches of the Order between 2011 and 2019 and agreed to remove the restrictions identified within its land agreements to become compliant.

The CMA's enforcement actions have sent a clear message to other large grocery retailers that breaching the Order will not be tolerated. The CMA's targeted program of activity has ensured that these retailers are aware of the consequences of non-compliance and have taken steps to address their breaches. This enforcement has likely encouraged other retailers to review their land agreements and ensure they are in compliance with the Order, thereby promoting fair competition and benefiting consumers.

Moreover, the CMA's wider work in the groceries sector, including investigations into loyalty pricing and market studies into the infant formula and follow-on formula market, demonstrates its commitment to protecting competition and ensuring that shoppers have access to a wider range of groceries and cheaper prices. This ongoing scrutiny is likely to further influence the behavior of large grocery retailers, encouraging them to comply with competition rules and regulations.

In conclusion, Co-op's admission of 107 breaches of the Groceries Market Investigation (Controlled Land) Order 2010 has significant implications for the competitive landscape in the UK's grocery retail market and potential consequences for consumers. The CMA's enforcement of the Order has influenced the behavior of other large grocery retailers, promoting fair competition and benefiting shoppers. The CMA's ongoing work in the groceries sector is likely to continue influencing the behavior of these retailers, promoting competition and benefiting consumers.