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Supermarkets are Killing Competition, Squeezing Producers & Artificially Controlling prices

Regulator finds Tesco unlawfully blocked rivals from opening stores

Edmund Heaphy

Finance and news reporter

14 February 2020

 
 

A Tesco store in London. The Competition and Markets Authority found against the supermarket giant on Friday. (Beata Zawrzel/NurPhoto via Getty Images)

The UK’s competition regulator on Friday said that Tesco (TSCO.L) had unlawfully prevented rival supermarkets from opening outlets close to its own stores.

The Competition and Markets Authority (CMA) said it discovered in 2018 that the UK’s largest grocery chain had prevented landlords from letting property to other supermarkets.

Not only could it have reduced competition and left shoppers “worse off,” the CMA said, but the practice is also unlawful under an order that it issued nearly 10 years ago.

Tesco was able to block rivals from opening stores near its own ones by introducing stipulations in land agreements, which in effect blocked landlords from signing leases with other chains.

Under the 2010 order, large grocery retailers are banned from preventing land being used by their competitors.

Following the CMA’s initial 2018 discovery, Tesco was asked to review its land agreements. It found 23 contracts — out of a total of its more than 5,300 agreements across the country — that breached the 2010 order.

Tesco, the CMA said, has now agreed to take “remedial action” for all of the affected agreements.

The supermarket will also improve its internal processes and staff training in order to prevent similar breaches from occurring in the future.

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