Discounters should face same land rules as grocers, UK regulator says

LONDON Aug 7 (Reuters) - Britain's competition regulator on Friday proposed extending supermarket land agreement rules to German-owned discounters Aldi and Lidl, saying the move would help ensure shoppers have the widest possible choice of where to buy groceries.

The Competition and Markets Authority (CMA) wants Aldi and Lidl covered by an order designed to stop supermarket groups using land agreements, such as restrictive covenants and exclusivity clauses, that can prevent rival grocers from opening nearby stores.

The order currently applies to seven supermarket groups: industry leader Tesco, Sainsbury's, Asda, Morrisons, the Co‑op, Marks & Spencer and Waitrose, but not Aldi and Lidl.

The CMA said its provisional view is that Aldi and Lidl should now be covered because of the scale and geographic reach of their store networks, their full range of groceries and their procurement model.

Aldi is Britain's fourth largest grocer, while Lidl is number five.

"This is about allowing shoppers to choose where they spend their money and levelling the playing field for all major supermarkets," Juliette Enser, executive director of competition enforcement and markets at the CMA, said.

Before reaching a final decision, the CMA will seek further views on whether Aldi and Lidl should be designated as "Large Grocery Retailers" under the order and therefore become subject to the land agreement rules.

Stakeholders have until September 7 to submit their views. The CMA said it expects to make a final decision in the autumn.

A spokesperson for Aldi said the CMA's move would not impact its long-term UK expansion plans: "We remain firmly committed to opening hundreds of new stores across the country."

A spokesperson for Lidl said the group welcomed competition: "Any outcome will not impact our steadfast momentum and growth."

(Reporting by Prerna Bedi in Bengaluru and James Davey in London. Editing by Nivedita Bhattacharjee and Mark Potter)