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May 12, 2006

UK: Tesco denies land bank accusations

The UK’s largest retailer Tesco has denied accusations that the supermarket chain stockpiles land and attaches restrictive agreements to its sale to block the construction of rival stores.

The UK’s largest retailer Tesco has denied accusations that the supermarket chain stockpiles land and attaches restrictive agreements to its sale to block the construction of rival stores. 

The UK’s Office of Fair Trading announced on Monday (8 May) that it was launching a Competition Commission investigation into the grocery retail sector. One of the accusations that the watchdog will examine is that large retailers, Tesco in particular, accumulates land in order to prevent rival retailers building outlets. 

Tesco spokesman John Church told just-food today (12 May) that the land Tesco owns is for the development of Tesco stores.

“Of course we have a supply of land,” he commented. “It is pipe-line land that will be used to develop new stores. This can be a drawn-out process, and we can end up holding the land for long periods, because of the slowness of the planning system.”

Church refused to be drawn on how much land Tesco currently owns, suggesting that this figure is constantly changing. 

As to the sale of land with restrictive covenants, Church acknowledged that Tesco did sometimes employ this tactic, but “very rarely”.

“Restrictive covers are used across the industry. We use them very rarely and often with good reason, for example local planning requirements,” he said.

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