Aldi and Lidl to face to same rules as Tesco in competition crackdown

Budget chains Aldi and Lidl are to be bound by the same restrictions as other major supermarkets to prevent them from stopping rival branches being built, the competition watchdog announced.

The Competition and Markets Authority (CMA) stated that subjecting the discounters to land agreement rules alongside brands like Sainsbury’s and Tesco will work “to ensure customers get the best choice of where to shop”.

Under the updated regulatory framework, Aldi, Lidl GB and Lidl NI are now officially classified as “large grocery retailers”.

Existing industry controls have been enforced against Tesco, Sainsbury’s, Asda, Morrisons, Co-op, Waitrose and Marks and Spencer since 2010.

The rules were introduced to stop large grocery chains from using land contracts to make it harder for rivals to open nearby, particularly through restrictive covenants and exclusivity arrangements.

Aldi is currently the UK’s fourth largest supermarket chain, with a 10.5 per cent share of the grocery market, with Lidl the fifth largest, with a 8.6 per cent shares, according to recent data from Worldpanel by Numerator.

Aldi and Lidl both stressed the move will not affect their continued store expansion programmes across the UK.

It comes two months after the CMA first suggested the discount chains should come under the same rules as their rivals.

Juliette Enser, executive director for competition enforcement and markets at the CMA, said: “We put in place rules to stop big supermarket chains from blocking rival stores opening in their area, and now those rules apply to Aldi and Lidl.

“This will help level the playing field and make sure shoppers get the best choice of products and prices in their area.”

An Aldi spokeswoman said: “The CMA’s decision does not change our commitment to invest in the UK and work towards our long-term ambition of 1,500 stores, bringing high-quality, affordable food to more communities, while ensuring that we comply with any relevant obligations under the Controlled Land Order.

“We will invest a record £900 million next year in 40 new stores and continued improvements to our distribution network.”

A Lidl spokesman said: “As a discounter, we have always welcomed and embraced competition within the market and our focus remains on continuing to open new stores and bringing our high-quality, lowest-priced groceries to even more communities.

“The CMA’s decision regarding our status under the Controlled Land Order will not impact our steadfast momentum and growth.”