Restrictions on land use can be challenged

From 1st July, businesses will be able to apply to the Office of Fair Trading (OFT) to challenge the land use restrictions that limit competition with any of the UK’s seven largest grocery retailers.

Consequently, if a business is prevented from using a piece of land in the way that it wants to due to a restrictive covenant or exclusivity arrangement that favours Asda, Tesco, Sainbury’s, Morrisons, Waitrose, Marks & Spencer or the Co-operative Group, it can ask the OFT to investigate.

The regulator will then carry out a local market share test to determine whether there is an appropriate level of grocery competition in that area. If not, then the OFT can require the ‘big seven’ retailer to not use the covenants or arrangements currently in place.

This move is a result of the Groceries Market Investigation (Controlled Land) Order, which was introduced after an investigation by the Competition Commission.

For more information, please contact us.