Iceland managing director Richard Walker has claimed Aldi and Lidl are “preventing competition on retail parks” using “legal tricks” involving restrictive covenants in property deals.
While restrictive covenants, which are clauses that stop rivals opening shops near their competitors, have been subject to a Competitions and Markets Authority (CMA) review of grocer land deals, the discounters are not required to meet the rules, according to The Grocer.
This is due to Aldi and Lidl not being part of the market investigation when the laws were formed in 2010, due to their smaller size.
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Posting on LinkedIn, the Iceland boss said: “A priority for the Labour government is tackling the after-effects of the cost-of-living crisis… But more can be done to promote competition among supermarkets, not least revisiting the snappily-titled Groceries Market Investigation (Controlled Land) Order 2010: these ban restrictive land agreements, which actively prevent competition between supermarkets by prohibiting other retailers from opening within the same area.
“The German-owned supermarkets were just a twinkling in the CMA’s eye when this order was first made.”
He added: “Fourteen years on, and with the return of a Labour government, surely it is time to look at how the active use of these legal tricks is preventing competition on retail parks in towns across the UK.”
As it stands, Tesco, Sainsbury’s, Asda, Morrisons, Waitrose, M&S and Co-op are prohibited from using restrictive covenants under the Groceries Market Investigation (Controlled Land) Order 2010.
Earlier this month, Aldi unveiled plans to open 10 new stores across the UK in the coming months under its rapid expansion plans.
Meanwhile, Lidl hit a new UK record market share level in May, with 8.1% of the market.
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