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Boost to competition with supermarkets

21 Jun 2012

Businesses will be able to apply, as of 1 July, to the OFT for the removal of land use restrictions limiting competition against any of the UK’s seven largest grocery retailers.

Designed to help shoppers benefit from increased local competition, the measure 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 benefiting 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.

Further information can be found on the Office of Fair Trading website.

Written by Richard Nelson LLP

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