Britain's competition watchdog is proposing to prevent Aldi and Lidl blocking rival supermarkets from opening close to their shops. 

But the Competition and Markets Authority (CMA) said it was still seeking views before making a final decision. 

On Friday, the CMA said it had provisionally decided that Aldi, Lidl GB and Lidl NI should be subject to rules set out in the Groceries Market Investigation (Controlled Land) Order 2010, which already apply to Britain's largest supermarket chains. 

Aldi and Lidl are not covered by the rules because they were not considered to be 'large grocery retailers' when the 2010 Controlled Land Order was drawn up. Iceland is also exempt as a frozen food retailer. 

Since 2010, the likes of Asda, Morrisons, Sainsbury's and Tesco have been banned from having restrictive covenants in land deals. The covenants are designed to block rivals from opening shops nearby. 

The CMA said today: 'Using set criteria, the CMA reviews which retailers should be covered, and its provisional view is that Aldi, Lidl GB and Lidl NI should now be covered by the Order because of the scale and geographic coverage of their stores, their full range of groceries and their procurement model.'

The CMA previously said it would publish its final decision by the end of July, but it has not materialised. 

This month, Richard Walker, Iceland's executive chairman, urged the CMA to get on with deciding whether or not to rein in Aldi and Lidl.  

An Iceland Foods spokesperson told This is Money: 'We welcome the CMA’s provisional conclusion that Aldi and Lidl should be subject to the same rules as other major grocers. 

'Customers stand to benefit from greater local choice, stronger competition and a fairer grocery market, and we will engage fully with the consultation over the coming months.'

The CMA said Aldi and Lidl’s market shares ranked them amongst the top five food and grocery retailers.  

Before making a final decision, the CMA said it was seeking further views on whether Aldi, Lidl GB and Lidl NI should be designated as large grocery retailers under the Order and be subject to the land agreement rules.

An Aldi spokesperson said: 'The CMA's provisional decision does not impact our long-term growth plans across the UK. We remain firmly committed to opening hundreds of new stores across the country, bringing Aldi's unbeatable value and award-winning quality to even more customers.'

A Lidl spokesperson said: 'We note the CMA’s provisional decision regarding our status under the Controlled Land Order. 

'As a discounter, we have always welcomed and embraced competition within the market and our focus remains on continuing to open new stores and bringing our high-quality, lowest-priced groceries to even more communities. Any outcome will not impact our steadfast momentum and growth.' 

Juliette Enser, executive director of competition enforcement and markets at the CMA, said: 'We want everyone to have the best choice of supermarket and range of prices when buying their groceries. 

'To ensure this happens, we put rules in place to prevent big supermarket chains blocking rival stores from opening nearby – and now we propose applying those rules to Aldi and Lidl too.

'This is about allowing shoppers to choose where they spend their money and levelling the playing field for all major supermarkets. Today’s proposals are provisional and we welcome views before deciding the best way forward.'