Iceland boss says competition rules ‘rigged’ in Aldi and Lidl’s favour

The boss of Iceland has claimed Britain’s competition rules are rigged in favour of Aldi and Lidl amid a row over new store openings.

Richard Walker, the executive chairman of the 980-store retailer, claimed the Competition and Markets Authority (CMA) was being too slow in forcing the German chains to face similar store-opening restrictions as traditional supermarkets.

Under rules introduced in 2010, Tesco, Sainsbury’s, Morrisons, Asda, Waitrose, Marks & Spencer and Co-op are prevented from blocking rival supermarkets from opening nearby their stores.

However, Aldi and Lidl are not included in the rules – known as restrictive land clauses – meaning they can write rules into their land contracts which stop rivals from opening nearby.

Mr Walker said the CMA ought to take urgent action, warning that the German discounters were using restrictive land clauses in their new stores to curb competition.

“The regulator drones on about being pro-growth but fails to act when markets are clearly being rigged,” he claimed.

“I urge the CMA to pick up the phone to me today to tell me I am wrong, and that they are going to fix this mess. This has got to stop – what are they afraid of?”

Aldi and Lidl were not included in the order because when the rules came in, the pair were considered too small – holding just 3pc and 2.5pc of the grocery market respectively.

However, supermarket bosses have demanded a rethink, so that Aldi and Lidl fall under the restrictions.

Today, the two grocers hold almost a fifth of the grocery market.

Aldi is Britain’s fourth largest supermarket, opening a new store every week, while Lidl is its sixth biggest grocer. It will open its 1,000th store next week.

Iceland is also exempt from the restrictive land clauses because of its small size. However, the rules mean it too cannot expand into Aldi and Lidl’s territory.

Mr Walker claimed both companies were engaging in “anti-competitive practices to block us from opening stores near them” without facing rebuke from regulators.

It follows complaints by grocery chiefs over apparent hold-ups at the regulator in its overhaul of the rules.

Supermarket bosses first raised claims of an unfair playing field with Aldi and Lidl last autumn, with officials at the time said to have suggested the rules would be reviewed in early 2025.

In April, the CMA told supermarkets that it was aware of their frustration over the different treatment.

However, an overhaul of the system has since been pushed back multiple times, grocery insiders claim.

Until last month, companies say they had been told to expect an update in the autumn. In October, the CMA is said to have told companies that it would complete its review by the end of the year.

Supermarket sources said they now expected the CMA to “further kick the can down the road” and request more information rather than slap new restrictions on Aldi and Lidl.

One senior grocery source said the situation was preventing supermarkets from opening stores, suggesting it was “entirely inconsistent with the Government’s focus on economic growth, fair competition and consumers”.

They added that the regulator appeared “unwilling or unable to make even simple, timely tweaks to regulation to unlock retail investment”.

Rachel Reeves is already looking into whether top watchdogs, such as the CMA, have become a brake on the economy. The Chancellor has described regulators as “a boot on the neck” of businesses.

The CMA said it took retailers’ concerns seriously.

A spokesman said: “We must act within the legal framework and be fair to all grocery retailers and we are committed to using our powers to support competition.

“We expect to provide an update soon.”

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