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Businesses can challenge land use restrictions that benefit supermarkets

From 1 July, businesses may apply to the Office of Fair Trading (OFT) to challenge land use restrictions that limit competition against major supermarkets.

A Competition Commission investigation into the grocery market found that certain restrictive covenants and exclusivity arrangements could prevent local grocers from competing against large supermarkets. The investigation led to the Groceries Market Investigation (Controlled Land) Order, which allows these restrictions to be challenged.

The order obliges Tesco, Asda Stores, Co-operative Group, Marks and Spencer, Wm Morrison Supermarkets, J Sainsbury and Waitrose to inform the OFT about store acquisitions. Local businesses may apply to the OFT to challenge restrictive covenants or exclusivity arrangements that benefit these supermarkets.

Once an application is made, the OFT will test the extent of grocery competition in the local area and use the results to determine whether any restrictions benefitting a major supermarket should be lifted.