ASDA staff have been told to take Tesco flyers out of newspapers and put them in bins.
But staff felt too ashamed to carry out the tactics, saying they weren't even allowed to recycle the leaflets.
Asda bosses admitted thousands of leaflets were binned at an Edinburgh store this month.
One Asda worker at the capital's Chesser sto
re said his bosses were "scared of a bit of competition".
He added: "One of the people in the cigarette kiosk had to stand and take all the inserts out and was really hacked off about it.
"They were going to quit on the grounds that it was eco-unfriendly and went against their ethics."
The "final straw", according to the worker, was when Tesco took out a full front page advert on a local paper, and staff were told to cover them up.
Wal-Mart-owned Asda had previously set a target of 2010 to stop sending all waste from its 307 UK stores to landfill sites. They pledged to recycle, reuse or compost all of their waste.
Scottish Green Party founder Robin Harper MSP said it would be "easy" for Asda to recycle the fliers. He added: "I am concerned that the flyers are ending up in landfill when Asda must be making moves to recycle all their waste."
An Asda spokesman said: "Unfortunately it seems that the situation last Wednesday did happen. I can categorically state that this is not a company policy and not something the senior management were aware of.
"As a priority the store manager will communicate with store staff to ensure this situation does not occur again."
The full article contains 283 words and appears in The Scotsman newspaper.
