Sainsbury’s, Morrisons and Iceland have urged the competitions watchdog to widen the scope of the Controlled Land Order
Aldi and Lidl have been accused of using old property rules to block rivals from opening new stores.
Sainsbury’s, Morrisons and Iceland have urged the competitions watchdog to widen the scope of the Controlled Land Order, which prevents large grocery retailers from adding restrictions to their land to stop competitors from opening stores nearby.
They want Aldi and Lidl to be classed as “large grocery retailers” due to their massive expansion over the last few years, as opposed to their current category of “limited assortment discounters”.
The rules were introduced in 2010 and impacts big supermarket chains such as Tesco, Morrisons, Sainsbury’s and Asda.
Aldi and Lidl were not included at the time as they were much smaller, but the other supermarkets argue that their market share has grown from less than 3% to about 20% today.
However, Aldi says its classification should not be changed as it offers “consistently” lower prices that are “only achievable” by limiting its product range.
Aldi has around 1,050 stores with a long-term goal of 1,500 branches, while Lidl has more than 1,000 sites and wants to have 1,100 shops by the end of 2025. The CMA is expected to make a preliminary decision in July.
In a written response to a consultation by the watchdog, Sainsbury’s said: “Competition is currently distorted by the asymmetric ability of Aldi, the fourth largest grocery retailer in the UK, and Lidl, the fifth largest grocery retailer in the UK, to restrict entry and expansion by competitor grocery retailers in local markets, while equivalent restrictions apply to other retailers of comparable or smaller scale.”
Richard Walker, executive chairman of Iceland Foods, said: “Our position is simple: the same rules should apply to the same type of market power. It would be neither rational nor reasonable for Aldi and Lidl to be allowed to wriggle out of this.
“If land restrictions can prevent rival grocers from opening near customers, then that matters for competition, choice and prices, especially in communities where household budgets are already under pressure.”
In a written statement to the CMA, Morrisons said: “Morrisons considers that expanding the scope of the Controlled Land Order to include Aldi and Lidl is necessary to ensure a level playing field within the UK Groceries Sector.”
Aldi said in its submission to the CMA: “We do not operate ecommerce, click and collect or home delivery services, butchery or fishmonger counters, delicatessens, pharmacies, opticians, cafés or 24-hour stores.
“We do not sell tobacco products or newspapers. Our stores are significantly smaller, with a standard net sales area of approximately 1,230 square metres.” The Mirror has contacted Lidl for comment.
