Asda and Morrisons have hit out at the Competition Commission for its proposed remedies on restrictive covenants and exclusivity agreements ahead of the Commission’s expected final report next month.

In documents seen by Retail Week, both grocers lambast proposals to ban restrictive covenants – which prevent rival grocers from buying sites – and impose a five-year limit on exclusivity agreements.

The salvos from Asda and Morrisons are further evidence of the big grocers’ determination to limit the scope of the Commission’s proposed remedies in its inquiry into the£130 billion UK grocery sector.

“Given the Commission’s limited adverse finding, Morrisons considers that grocery retailers should be permitted to impose and enforce restrictive covenants unless it can be shown by the Office of Fair Trading that these lawful restrictions over land sites by grocery operators are preventing the development of a new third-party store in a particular area of high concentration,” said the Bradford-based grocer.

Asda said the proposed remedies to lift existing and ban future restrictive covenants and exclusivity arrangements were “disproportionate” and the Competition Act 1998 provides a more appropriate remedy.

Separately, the Wal-Mart-owned grocer said that retailers should be able to request retrospective changes to begin a commercial discussion with suppliers. Asda said: “Suppliers can and do refuse such requests.”

Asda corporate and legal affairs director Paul Kelly expressed concerns over the proposed introduction of an ombudsman to regulate relationships between grocers and suppliers.

He said: “We would be worried about regulatory creep. What I mean is that, suddenly, the regulator moves themselves out of looking purely at competition-related issues.”

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