Iceland boss calls for review of supermarkets’ restrictive covenant ban

Iceland managing director Richard Walker has urged the new Labour government to review the ban for supermarkets to use restrictive covenants in property deals.

In a LinkedIn post, Walker claimed that “legal tricks” have been used in the past by German-owned supermarkets Aldi and Lidl to prevent competition on retail parks in towns across the UK. 

Restrictive covenants in property deals are clauses that prevent rival supermarkets from opening shops near their competitors. 

Their use has been reviewed by the Competitions and Markets Authority (CMA) in 2010 which allowed Aldi and Lidl not to follow the rules due to their smaller size. Meanwhile seven of the biggest UK supermarkets – Tesco, Sainsbury’s, Asda, Morrisons, Waitrose, M&S and Co-op – are banned from having restrictive covenants. 

But now Walker has called on the new Labour government to review this issue again. 

He said: “More can be done to promote competition among supermarkets, not least revisiting the snappily-titled Groceries Market Investigation (Controlled Land) Order 2010: these ban restrictive land agreements, which actively prevent competition between supermarkets by prohibiting other retailers from opening within the same area.

“The German-owned supermarkets were just a twinkling in the CMA’s eye when this order was first made.”  

Walker also stated that it is a “priority” for the Labour Party to tackle the “after-effects of the cost-of-living crisis” and that Iceland has already “taken a stand against price-gouging” on products such as infant formula.  

Aldi and Lidl have been contacted for comment.