Aldi and Lidl should face same land agreement rules as supermarket rivals, watchdog says

Restrictions currently apply to seven retailers

Aldi and Lidl ought to be subject to the same land agreement regulations as Britain’s biggest supermarket chains, the UK’s competition watchdog has said in provisional findings.

The Competition and Markets Authority (CMA) proposal would prevent the German discount retailers from obstructing rival supermarkets from setting up near their stores.

Rules designed to stop large grocery retailers from using land agreements to make it harder for rival supermarkets to open nearby, particularly through restrictive covenants and exclusivity arrangements, were introduced in 2010.

The restrictions currently apply to seven retailers – Asda, Co‐op, Marks and Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose.

In a provisional decision, the CMA said it believes Aldi, Lidl GB and Lidl NI should also be subject to the rules.

Aldi is the UK’s fourth largest grocer, with a 10.8% share of the market, and Lidl the sixth largest with an 8.8% share, according to recent figures from Worldpanel.

Both retailers have expanded rapidly through new store openings in recent years, while also drawing in fresh customers with their competitive discount pricing.

The regulator noted that the brands were not originally included in the rules owing to their more limited product ranges, but stated they should now fall under the restrictions following significant expansion of their store estates and the opening of larger outlets.

The CMA has confirmed it is seeking further views before reaching a final decision. Juliette Enser, executive director of competition enforcement and markets at the CMA, said: “We want everyone to have the best choice of supermarket and range of prices when buying their groceries.

“To ensure this happens, we put rules in place to prevent big supermarket chains blocking rival stores from opening nearby – and now we propose applying those rules to Aldi and Lidl too.”

An Aldi spokesman said: “The CMA’s provisional decision does not impact our long-term growth plans across the UK.

“We remain firmly committed to opening hundreds of new stores across the country, bringing Aldi’s unbeatable value and award-winning quality to even more customers.”

A Lidl spokesman said: “We note the CMA’s provisional decision regarding our status under the Controlled Land Order.

“As a discounter, we have always welcomed and embraced competition within the market and our focus remains on continuing to open new stores and bringing our high-quality, lowest-priced groceries to even more communities. Any outcome will not impact our steadfast momentum and growth.”

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