Amazon Calls UK Grocer-Label Decision ‘Chilling’

Amazon is now considered a grocer in the U.K. and will be subject to the same rules and regulations as other supermarkets, a decision the eCommerce giant called “chilling.”

The decision was handed down by the U.K.’s Competition and Markets Authority (CMA) on Wednesday (Feb. 9) and compliance will be overseen by the independent Groceries Code Adjudicator. Grocers must adhere to the rules if their annual sales top £1 billion ($1.36 billion), and the code specifically prevents larger grocers from unfairly treating their suppliers.

“Households across the U.K. are increasingly using Amazon to buy food and other essential items. Today’s decision to designate Amazon helps to ensure a level playing field for companies active in the groceries sector as people’s buying habits evolve,” Adam Land, senior director of remedies, business and financial analysis at the CMA, said in the CMA’s statement.

“These rules mean that the thousands of companies supplying Amazon with groceries are now protected from potential unfair business practice,” Land added.

See also: Amazon to Expand ‘Just Walk Out’ to the Suburbs as Grocery Shoppers Demand Frictionless Convenience

Amazon, however, disagrees and has pushed back against the CMA, arguing that sale at its Fresh & Wild subsidiary fell below £100 million ($135 million) and had only seven stores. The regulator said Amazon maintained that designating Fresh & Wild as a grocery would create a “chilling precedent.”

Headquartered in Seattle, Amazon’s grocery division is Amazon Fresh, which offers same-day delivery for Prime members at no additional charge.

The company has launched several physical stores in recent years, including its cashierless Amazon Go convenience stores, larger grocery stores under the Amazon Fresh banner and its purchase of Whole Foods.

In addition, Amazon has a U.K. partnership with the Wm Morrison Supermarkets chain and a minority stake in Deliveroo. In the greater London area, there are 15 Amazon Fresh stores, seven Whole Foods and one Amazon Go.

“We strive to build successful, long-term relationships with our suppliers and look forward to working with the Groceries Code Adjudicator,” an Amazon spokesperson told the Financial Times. “We are proud to work with thousands of suppliers and offer a great shop window for their products in the UK and around the world.”