Tesco Express in Northampton found to be illegally blocking rivals from opening close by

A Tesco store in Northampton has been found to be unlawfully stopping competitors opening shops nearby.

Tesco Express near Portland Place on Wellingborough Road was one of the stores that prevented landlords from letting property to rivals by adding a clause to the lease.

The Competition and Markets Authority (CMA), which is a government organisation, first found unlawful acts such as these during monitoring in 2018.

After the initial discovery, Tesco reviewed all of its land agreements and found 23 breaches of the Groceries Market Investigation (Controlled Land) Order that was passed in 2010.

The supermarket giant says these unlawful acts are historic and in place before the law was passed.

The CMA says the breaches may have reduced competition, lowered choice and left shoppers worse off.

Andrea Gomes da Silva, executive director at CMA said: “It’s unacceptable that Tesco had these unlawful restrictions in place for up to a decade.

“By making it harder for other supermarkets to open stores next to its branches, shoppers could have lost out.

“In the future, we want the ability to fine businesses if we find that they are in breach of our orders. That’s why we’ve called on the Government for more powers.”

Tesco has agreed to take remedial action for all affected land agreements, improve its internal processes and staff training to avoid future breaches and ensure that all new land agreements are in line with the law.

A spokeswoman for Tesco said: “We do not use restrictive property agreements. However, in a small number of historic cases between 2010-15, administrative errors by former advisors meant that our internal processes were not followed correctly.

“As the CMA recognises, we have worked collaboratively in resolving this, and our voluntary review of 5,354 land deals found isolated issues in just 0.4 per cent of these.

“We have since strengthened our controls and training, and are releasing the affected parties from all non-compliant terms.”

The CMA is also writing to all other supermarkets bound by the order - Waitrose, Sainsbury’s, Asda, Morrisons, M&S and the Co-op - asking them to show that their land agreements are not in breach.

If any supermarket is not compliant, the CMA will consider taking enforcement action.