Competition Commission unveils sweeping supermarket probe
Friday, 15 Feb 2008 14:53
UK supermarkets could see changes after Competition Commission report
The Competition Commission has published its long-awaited report into UK grocers today, which will see sweeping changes introduced to the market.
Among the recommendations is an ombudsman to protect food suppliers in disputes with the big chains, changes to the planning system and the ability to enforce a tighter supermarket code of practice (SCOP).
The big four grocers - Asda, Tesco, Sainsbury's and Morrisons - have been accused of buying up land to prevent rivals opening nearby.
And the allegation that they are using their buying power to set unfair prices for suppliers has also been heeded by the commission.
Large grocers could be forced to sell land if local planners deem a single retailer owns too much in one area and does not intend to develop it.
The new version of the SCOP will incorporate all grocery retailers with a turnover greater than £1 billion, and the commission will require each chain that falls into this category to employ compliance officers to ensure the code is followed correctly.
According to market research group TNS Worldpanel, the top four retailers now account for more than three quarters (76.2 per cent) of the grocery market.
But the UK's biggest supermarkets say their success is down to popularity with consumers rather than monopolising specific markets.
Although the report has been welcomed by small businesses, British Retail Consortium director general Stephen Robertson claims the continued probing of the market is "peripheral" and unimportant.
"This is the third major investigation into the sector since 2000," he said.
"They are costly and time consuming. It's time retailers were allowed to get on with delivering for customers."
The commission launched an inquiry to investigate the claims two years ago and the results have finally come through today.
In its preliminary report, published last October, the commission said it was concerned over some aspects of competition within the grocery market, including the effects of large grocers on small, independent shops and farmers.
The report also raised concerns over the implications of the strong position of market-leader Tesco, and its accumulation of a so-called 'landbank'.