The End of the Exemption? The Debate Over Reclassifying UK Discounters
The Competition and Markets Authority is currently investigating whether Aldi and Lidl should be officially reclassified as large grocery retailers under the 2010 Controlled Land Order. This legal framework was originally designed to prevent major supermarkets from using restrictive land agreements to block competitors from opening nearby stores. At the time the order was created, Aldi and Lidl were considered small players with limited stock, but their massive growth over the last decade has prompted a review of whether they still qualify for this “limited assortment” exemption.
Major competitors like Sainsbury’s and Morrisons argue that the discounters now hold a combined 20% of the market and should follow the same rules as everyone else to ensure a level playing field. They suggest that Aldi and Lidl have both the incentive and the market power to restrict local competition through land deals, just as the larger traditional supermarkets do. Similarly, the Association of Convenience Stores supports the change, noting that the discounters’ larger store formats now impact the viability of local shops across much wider areas than they used to.
In contrast, Aldi maintains that it still functions as a limited assortment discounter and should not be designated as a large retailer. The core of the debate rests on whether the range of products these stores offer is truly comprehensive or still significantly narrower than a traditional supermarket. The CMA is now weighing these conflicting views and examining evidence regarding product variety, pricing strategies, and whether the current exclusion of these two chains has unfairly harmed competition or limited choices for British consumers.