LONDON—Amazon’s food retail business in Britain faces increased regulation after the competition watchdog said rules setting out how grocers should treat their suppliers will now apply to the U.S. giant. The Competition and Markets Authority (CMA) said on Wednesday that due to Amazon’s increasing activity in the UK grocery sector it must now comply with the Groceries Supply Code of Practice. The code applies to retailers with an annual turnover of more than 1 billion pounds ($1.4 billion) in grocery sales. Amazon does not break out figures for its UK grocery sales, so its designation under the code publicly confirms for the first time that its sales have crossed the 1 billion pound threshold. The code ensures grocers treat suppliers fairly. It restricts firms from making changes to supply contracts at short notice and also requires retailers to give an appropriate period of notice if they no longer want to …