#MarksandSpencerBreaches

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UK Supermarket Battle: CMA Ensures Fair Play

  Championing Shopper Choice: CMA Takes Action

In a significant move aimed at safeguarding consumer choice and promoting fair competition, the Competition and Markets Authority (CMA) has successfully secured commitments from major players Wm Morrison Supermarkets Limited (Morrisons) and Marks and Spencer plc (M&S) to halt their involvement in unlawful anti-competitive land agreements.   Ensuring Level Playing Fields: Uncovering Violations The CMA's investigation revealed that these retail giants, holding 8.6% and 3.4% market share in the UK's £188.1bn supermarket industry, violated the Groceries Market Investigation (Controlled Land) Order 2010. This order, designed to prevent supermarkets from stifling competition, ensures a more extensive range of groceries and affordable prices for consumers amid the rising cost of living.  

Breach Details Unveiled: Morrisons and M&S Under Scrutiny

Morrisons, with an astonishing 55 breaches between 2011 and 2020, now holds the dubious distinction of having the poorest compliance record on the CMA's radar. Although 14 restrictions have lapsed, a staggering 41 remain unresolved. Meanwhile, M&S breached the order 10 times between 2015 and 2019, with 5 restrictions already lifted and 5 awaiting attention. The severity of these violations prompted the CMA to communicate the breaches and corrective actions to both supermarket giants.   Adam Land's Perspective: A Call for Compliance Adam Land, Senior Director of Remedies Business and Financial Analysis at the CMA, stressed the critical role of robust competition in easing financial pressures during weekly grocery shopping. Land emphasized, "There can be no excuses for non-compliance with an Order made in 2010, especially when we understand the positive impact of new stores on the high street." The ongoing efforts against these restrictions form part of the CMA's broader initiative to address the cost of living and amplify consumer choice.  

Beyond Morrisons and M&S: A Wider Crackdown

Today's action is part of the CMA's focused program to enforce rules on land agreements, extending its vigilance beyond Morrisons and M&S. Similar breaches by Tesco in 2020 (23 breaches), Waitrose in 2022 (7 breaches), and Sainsbury’s and Asda in 2023 (18 breaches and 14 breaches, respectively) have also faced regulatory action. This underscores the CMA's commitment to ensuring a competitive landscape and affordable prices for supermarket customers.   A Broader Perspective: CMA's Ongoing Grocery Sector Review In a separate initiative, the CMA is conducting a comprehensive review of competition in the grocery sector. The latest findings and next steps have been outlined in its ongoing assessment, focusing on branded and own-label food suppliers. This builds on previous updates regarding retail competition within the sector.  

Understanding the Order: Bans and Designated Retailers

The 2010 Order prohibited new restrictive covenants preventing land use for supermarkets and banned Exclusivity Arrangements lasting over 5 years. Seven designated large grocery retailers, including Tesco, J Sainsbury, Morrisons, Asda, Co-operative Group, Waitrose, and Marks and Spencer, are currently subject to the order. The CMA's letters to M&S and Morrisons, detailing responses to reported breaches, are publicly available.   Looking Ahead: CMA's Enhanced Powers The CMA currently cannot impose financial penalties for breaching competition remedies, but it's expected that the pending Digital Markets, Competition, and Consumers Bill in Parliament will grant these powers in the future. Enhanced CMA powers aim to increase business compliance with competition remedies, offering greater protection for consumers in the supermarket sphere. The CMA's ongoing assessment of land deals by other supermarkets covered by the Order reflects a sustained commitment to upholding fair competition in the grocery sector.   Sources: THX News & Competition and Markets Authority. Read the full article