The Competition Commission (CC) has published a second consultation on a draft order on land agreements stemming from its market investigation into the groceries sector. Responses are invited by 23 November 2009.

The CC's conclusions included a recommendation to limit the ability of designated large grocery retailers to prevent land being used by their competitors for grocery retailing in the future. The main thrust of the order is a requirement that designated large grocery retailers:

  • release certain restrictive covenants;
  • do not enter into new such covenants;
  • do not enforce certain exclusivity arrangements; and
  • do not enter into such covenants.

This second consultation order takes into account responses to an earlier consultation in April this year (see our earlier law-now on this).

Certain changes have been made to the order to reflect consultation responses. These include:

  • changes to deal with the situation where a retailer cannot, despite its best endeavours, procure that a restrictive covenant is removed from the relevant land register. The draft order requires the retailer in this situation to procure the noting of the attempted removal on the appropriate register, execute a declaration that it will not enforce the restrictive covenant and ensure that any successors in title of the land benefiting from the restrictive covenant sign a similar declaration;
  • clarification that 'best endeavours' does not include an obligation to make payments to procure parties to consent to any release;
  • adopting a narrow exception for certain categories of land that are necessary for the operation of a grocery store;
  • introducing a limited exception for land owned by retailers' pension companies;
  • a requirement that designated grocery retailers notify the OFT if they acquire a grocery store with a net sales area of over 1000 square metres.

This consultation is likely to be the last chance to input into the proposed order before it becomes law.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 17/11/2009.