Co-op re-writes anti-competitive land agreements
Grocery retailer addresses over 100 land agreements which restrict rivals opening nearby.
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Co-operative Group Limited (Co-op) has admitted to 107 breaches of an Order put in place to protect competition and stop the use of unlawful anti-competitive land agreements in grocery retailing.
The Competition and Markets Authority (CMA) found that the supermarket chain, which owns almost 2,400 stores across the UK and holds a 5.2 per cent market share in the UK’s £190.9bn supermarket industry, breached the Groceries Market Investigation (Controlled Land) Order 2010.The Order was introduced to stop supermarkets imposing restrictions that block rivals from opening competing stores nearby. By ensuring supermarkets compete freely, the CMA is ensuring that shoppers have more choice and so benefit from a wider range of groceries and access to cheaper prices.
The CMA was concerned that this substantial number of breaches demonstrates a significant failure of compliance for a business of Co-op’s size. Having already addressed 104 agreements, Co-op has also agreed to resolve the remaining 3.
Daniel Turnbull, Senior Director of Markets at the CMA said:
Restrictive agreements by our leading retailers affect competition between supermarkets and impact shoppers trying to get the best deals.
We know that Co-op has made a considerable effort to amend all their unlawful agreements, given this Order has been in place since 2010. Co-op and the other designated retailers must make sure they do the right thing by their customers in the future.
Today’s action is part of a targeted programme of activity by the CMA to enforce the Order’s rules on land agreements, and thereby protect competition between businesses, helping to keep prices down for supermarket customers. This includes action on similar breaches of the same rules by Tesco in 2020 (23 breaches); Waitrose in 2022 (7 breaches); Sainsbury’s (18 breaches); Asda (14 breaches) in 2023; Morrisons (55 breaches); and Marks and Spencer (10 breaches) in 2023.
The CMA’s wider work in the groceries sector includes an investigation of loyalty pricing and a market study into the infant formula and follow-on formula market which concluded with recommendations.
Notes to editors:
- For more information about the limits on large grocery retailers’ ability to prevent land being used by their competitors for grocery retailing in the future, please read: Groceries Market Investigation (Controlled Land) Order 2010 and the CMA’s guidance on Land Agreements.
- The Order came into force in 2010 and banned new restrictive covenants which prohibit land being used for a supermarket.
- The Order also banned Exclusivity Arrangements (which prevent landlords from allowing stores to compete with an existing supermarket) which were over 5 years long.
- There are seven designated large grocery retailers that the Order currently applies to: Tesco plc; J Sainsbury plc; Wm Morrison Supermarkets Limited; Asda Stores plc; Co-operative Group Limited; Waitrose Limited; and Marks and Spencer plc.
- The CMA’s letter sent to Co-op is publicly available and sets out the CMA’s response to its respective reported breaches.
- The Digital Markets, Competition and Consumers Act 2024 enhanced the CMA’s power to ensure compliance with its remedies, by empowering it to impose financial penalties for breaches of its remedy requirements. These enhanced powers apply to breaches of remedies put in place after the commencement of the new powers on 1 January 2025. As the Order was put in place in 2010, before the commencement of the new powers, the CMA does not have the power to fine those who breach the Order.
- For media enquiries contact the CMA press office on 0203 738 6460 or press@cma.gov.uk.