Co-op has become the latest major grocer to admit to having uncompetitive land deals in a long-running enforcement programme by the Competition & Markets Authority targeting major supermarkets.
The Co-op has admitted to 107 breaches of a competition order put in place in 2010 to stop major supermarkets having uncompetitive land agreements that prevent competing stores opening nearby with restrictive covenants.
The CMA wrote to Sainsbury’s, Asda, Morrisons, Waitrose, M&S and Co-op in 2020, instructing them to demonstrate they were not in breach of the 2010 order, after finding Tesco had 23 unlawful restrictions in place.
Co-op joins Sainsbury’s, Asda, Morrisons, M&S and Waitrose in the list of supermarkets found to have breaches of the order in land deals as a result of the action.
However, Co-op’s 107 breaches are the greatest number by a single retailer exposed to date in the action.
The CMA said it 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 of the breaches by amending the land agreements, Co-op has agreed to resolve the remaining three.
The convenience retailer owns almost 2,400 stores across the UK and holds a 5.1% grocery market share [Kantar].
“Restrictive agreements by our leading retailers affect competition between supermarkets and impact shoppers trying to get the best deals,” said CMA senior director of markets Daniel Turnbull.
“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.”
A Co-op spokesperson said: “As a business that is committed to operating fairly, we recognise this is extremely disappointing. Co-op operates in a range of markets, both as a community retailer and a national funeral provider and the number of breaches amount to less than 2% of transactions across our entire property portfolio.
“This is a matter we take very seriously, and we have taken all necessary action to ensure this issue is resolved and does not happen again.”
The CMA’s action has brought to light 55 breaches by Morrisons, 18 by Sainsbury’s, 14 by Asda, 10 by M&S and seven by Waitrose. In each case the retailer agreed to rectify any outstanding breaches.
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