Supermarkets Need Competition Test, Says Report

The Birmingham Post (England), May 1, 2008 | Go to article overview

Supermarkets Need Competition Test, Says Report


Campaigners yesterday dismissed a report into supermarket dominance of the grocery sector as a "failure", saying it will do little to protect consumers or independent retailers.

The Competition Commission unveiled a planning shake-up in a bid to boost competition in the pounds 95 billion grocery market.

The culmination of the two-year probe into the sector will see a new 'competition test' in planning decisions on larger stores as well as action to prevent land agreements restricting competitors from entering the market.

It also recommends a new independent ombudsman who will enforce a strengthened code of practice to protect suppliers, governing all grocery retailers with a turnover greater than pounds 1 billion.

The UK's four biggest supermarkets - Tesco, Sainsbury's, Asda and Morrisons - all came under scrutiny in the investigation.

The commission said: "Although, in many areas, there is good choice and strong competition between retailers, there are also a significant number of local areas where larger grocery stores face limited competition and local shoppers lose out."

Measures include involving the Office of Fair Trading (OFT) in all planning applications for new grocery stores bigger than 1,000 square metres.

Restrictive covenants, which retailers can use to prevent competitors building new stores, will also be lifted or face scrutiny.

Retailers will not be allowed to retrospectively change their agreements with suppliers or shift risks and costs on to them, and will have to enter into arbitration to resolve disputes. …

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