The Competition and Markets Authority (CMA) found that the retailer had repeatedly breached the 2010 Groceries Market Investigation (Controlled Land) Order, which was introduced to prevent supermarkets from imposing restrictions that block rivals from opening competing stores nearby.
In response, Co-op has now addressed 104 of the unlawful agreements and has agreed to resolve the remaining three.
Co-op owns almost 2,400 stores across the UK and holds a 5.2% share of the country’s grocery market.
The CMA has stepped up attempts to enforce land agreement rules in recent years in an attempt to protect competition between businesses and keep prices down for supermarket customers.
This includes action on similar breaches of the same rules by Tesco (23 breaches), Waitrose (7 breaches), Sainsbury’s (18 breaches), Asda (14 breaches), Morrisons (55 breaches) and Marks and Spencer (10 breaches).
“Restrictive agreements by our leading retailers affect competition between supermarkets and impact shoppers trying to get the best deals,” said Daniel Turnbull, senior director of markets at the CMA.
“We know that Co-op has made a considerable effort to amend all their unlawful agreements, given this Order has been in place since 2010. Co-op and the other designated retailers must make sure they do the right thing by their customers in the future.”
Turnbull has also written an open letter to Co-op detailing the breaches and expressing the CMA’s concerns about that the “substantial number” of breaches.
He added that such a pattern was demonstrative of a “significant failure of compliance” by a business of Co-op’s size.
“The CMA acknowledges that Co-op has proactively taken steps to address the root causes of these breaches, has cooperated with the CMA to date and is now working with the CMA to take further remedial action to address the breaches identified,” he continued.
“Along with other Large Grocery Retailers, Co-op will now also report annually to the CMA regarding its compliance with the Order.”
In response to the open letter, a Co-op spokesperson said: “As a business that is committed to operating fairly, we recognise this is extremely disappointing.
“Co-op operates in a range of markets, both as a community retailer and a national funeral provider and the number of breaches amount to less than 2% of transactions across our entire property portfolio. This is a matter we take very seriously, and we have taken all necessary action to ensure this issue is resolved and does not happen again.”
