3 weeks ago
Aldi and Lidl Face Same Competition Rules as Tesco, Asda
In the United Kingdom, there is a rulebook that stops really big supermarkets from making secret deals that keep other supermarkets away.
This rule was made in 2010, and it helps make sure shoppers have different stores nearby to choose from.
Aldi and Lidl, two popular discount food stores, did not have to follow this rule before because they were smaller.
Now they have grown very big, so the people who look after fair shopping want them to follow the same rules.
Aldi and Lidl say the new rules will not stop them from opening new stores.
They say they will keep bringing cheaper groceries to more towns and communities.
Giving all big supermarkets the same rules helps create a level playing field.
This is good news for shoppers because when stores compete, prices stay lower.
The final decision will be made after everyone has had a chance to share their thoughts.
The UK's Competition and Markets Authority (CMA) has provisionally proposed extending the Controlled Land Order to Aldi, Lidl GB and Lidl NI.
The 2010 rules stop large supermarkets from using restrictive land agreements, such as exclusivity clauses and covenants, that block rival stores from opening nearby.
The order currently applies to seven supermarket groups: Asda, Co-op, Marks & Spencer, Morrisons, Sainsbury's, Tesco and Waitrose.
Aldi has become the UK's fourth-largest supermarket with a 10.8 per cent market share, while Lidl ranks sixth with 8.8 per cent.
Both Aldi and Lidl say the proposal will not affect their UK expansion plans, and the CMA is now seeking further feedback before a final decision.
- Who
- The UK Competition and Markets Authority (CMA), along with supermarkets Aldi and Lidl.
- What
- The CMA provisionally proposed bringing Aldi, Lidl GB and Lidl NI under the Controlled Land Order, preventing them from using land agreements that stop rival supermarkets opening nearby.
- Where
- United Kingdom.
- When
- Announced recently; the CMA is currently seeking further feedback before making a final decision (no specific date was given).
- Why
- Aldi and Lidl have grown significantly in store size, range and market share, and the CMA wants shoppers to continue benefiting from wide choice and competitive prices.
Key facts
- Regulator
- Competition and Markets Authority (CMA)
- Proposal
- Extend the Controlled Land Order to Aldi, Lidl GB and Lidl NI
- Rules introduced
- 2010
- Groups currently covered
- Asda, Co-op, Marks & Spencer, Morrisons, Sainsbury's, Tesco and Waitrose
- Aldi UK market share
- 10.8% (fourth-largest supermarket)
- Lidl UK market share
- 8.8% (sixth-largest supermarket)
- Retailer response
- Both Aldi and Lidl say UK expansion plans remain unchanged
- Next step
- CMA to review responses before deciding whether to formally add Aldi and Lidl
Quotes
Juliette Enser
Executive director of competition enforcement and markets at the CMA
“the proposal was intended to ensure shoppers continue to benefit from a wide choice of supermarkets and competitive prices”
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