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Businesses can apply to remove land use restrictions that limit competition against supermarkets
50/12 20 June 2012
From 1 July, businesses will be able to apply to the OFT for the removal of land use restrictions which limit competition against any of the UK's seven largest grocery retailers.
This measure is designed to help shoppers benefit from increased local competition, and has been put in place following the Groceries Market Investigation (Controlled Land) Order made by the Competition Commission in 2010.
The Order was made as a result of the Competition Commission's investigation into the grocery market which found that the existence of certain restrictive covenants and exclusivity arrangements could protect supermarkets from local competition from rival grocery outlets. This new procedure allows these restrictions to be challenged.
The procedure will involve the OFT testing the extent of grocery competition in a given local area when an application is made. This analysis will determine whether a restrictive covenant or exclusivity arrangement benefitting Asda Stores Limited, Co-operative Group Limited, Marks and Spencer plc, Wm Morrison Supermarkets plc, J Sainsbury plc, Tesco plc, or Waitrose Limited should be lifted.
See further details on the procedure, how it will operate and how businesses can apply.
NOTES
- The 2008 Competition Commission groceries market investigation is available on the Competition Commission website.
- Schedule 4 to the Groceries Market Investigation (Controlled Land) Order 2010 sets out how the procedure ('the Test' as the Order calls it) is to be done.
- The seven largest grocery retailers to whom the Test applies are those listed above (and any associated businesses of any of these companies as described in Schedule 1 to the Order).
- In March 2011, the OFT published a guideline for businesses about the types of land agreements that may infringe competition law (see Guideline on the application of competition law to land agreements).
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