The competition regulator says it has taken Sainsbury’s and Asda to task over “unlawful” land agreements that prevent rival chains opening stores nearby.

The Competition and Markets Authority (CMA) said it had found 32 examples where the chains had placed restrictions on land agreements which, it said, was anti-competitive.

The watchdog is already investigating the grocery sector as a whole over fears shoppers may be getting a raw deal at the till amid the cost of living crisis, with food inflation hovering at record levels.

The CMA found that Sainsbury’s and Asda, who respectively hold the second and third highest market shares in the UK, “breached the Groceries Market Investigation (Controlled Land) Order 2010, which was brought in to stop supermarkets imposing new restrictions that stop rivals from opening competing stores nearby.

“By ensuring supermarkets compete freely, the CMA is ensuring that shoppers have more choice and so benefit from a wider range of groceries and access to cheaper prices”, the statement said.

It said that Sainsbury’s was responsible for 18 of the land agreements identified, dating back to between 2011 and 2019.

The CMA said that while Asda had removed the offending clauses to comply with its order, Sainsbury’s had agreed to the move but was yet to implement the changes.

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The regulator’s executive director for markets and mergers, David Stewart, added: “Restrictions of this nature are against the law, cause real harm to shoppers and will not be tolerated.”

He added: “This enforcement action today is part of our wider action to tackle the cost of living and ensure that families really benefit from more competition.

“We recently stepped up our work to assess whether any failure in competition is contributing to grocery prices being higher and we will be updating on this next month.”

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