Best practice & Ethics
Competition Commission to focus on local grocery market
The preliminary findings of the
Competition Commission’s
(CC’s) investigation into the grocery market have come under attack from the
Federation of Small Businesses (FSB), which
cast doubt on the agency’s intention of tackling supermarkets’ alleged abuse of
the planning system.
The CC has announced the latest part of its inquiry is to
focus on competition at the local level, which will involve looking at whether
supermarkets like Tesco are able to use land
holdings to assume such a strong position that other retailers are unable to
compete effectively.
Clive Davenport, FSB trade and industry chairman, said “We
have serious concerns about reports of blatant abuses of the planning system by
supermarkets, which the Competition Commission has failed to address in numerous
inquiries in the past”. The evidence of the CC’s findings so far, said
Davenport, does not inspire confidence that the authority will take tough action
where necessary.
The Association of
Convenience Stores (ACS) warned the CC against focusing only on supermarkets
using planning laws to stifle competition from other supermarkets. Indeed, said
ACS chief executive James Lowman, building more superstores will not increase
choice, but would rather be at the expense of local stores, reducing choice and
diversity.
However, the editorial in the
Financial Times (24 January) suggested that if people decide they genuinely
care about small independent shops, they will help them to survive by shopping
in them. The editorial in The Guardian
agreed that even if people long for the days of the local butcher and baker,
there seems little evidence they are willing to give up on the prices
supermarkets offer.
Tesco, the chain most often accused of “destroying the high
street”, welcomed the CC’s finding that there are not widespread problems in the
relationship between supermarkets and their suppliers.
However, Tesco chief executive Terry Leahy noted consumers
were barely mentioned in the CC’s preliminary findings and called for them to be
put at the forefront of the remainder of the inquiry. “All evidence continues to
show consumers are very satisfied with the choice available to them,” he said.
Links
Competition Commission
Federation of Small Businesses
Tesco
Association of Convenience Stores
Financial Times
The Guardian
February, 2007 |
