Competition Commission supermarket report expected

30-04-2008

Competition Commission supermarket report expected
The Competition Commission's (CC) final report into the UK grocery market is due out today and is expected to recommend changes to rein in supermarkets.

The report, which follows a five-year investigation, will put forward the regulator's final recommendations.

The big four grocers - Asda, Tesco, Sainsbury's and Morrisons - have been accused of buying up land to prevent rivals opening nearby and using their buying power to set unfair prices for suppliers.

Last October, the CC published a report outlining its concerns about competition in the sector, which included fair prices for suppliers and land banks.

In the most recent paper published by the CC, the watchdog said it was considering appointing a supermarkets ombudsman to oversee the sector.

Potentially, the ombudsman could have the power to fine retailers if they are found to abuse their suppliers.

In addition a new strengthened and extended Groceries Supply Code of Practice (GSCOP) could be introduced.

The regulator also said, although it would not take any action on land banks, it may take action on exclusivity arrangements and restrictive covenants being used by retailers to restrict entry by competitors.

However, the Campaign to Protect Rural England (CPRE) believes the proposed changes do not go far enough.

"The commission has been narrowly focused on competition between the big retail giants. It looks set to do nothing for the small shops and independents being squeezed out of the market by the big four," said Graeme Willis, local food campaigner at CPRE.

"To prevent market domination the commission is expected to propose a local competition test. But this wouldn't stem supermarket expansion and the further erosion of the character and vitality of our town centres."

More recently, the supermarkets have been accused of price fixing by the Office of Fair Trading (OFT) on a wide range of products, including dairy, tobacco, and branded health and beauty and food items.

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