The Association of Convenience Stores (ACS) has criticised the Competition Commission (CC) for being “timid” in its proposed remedies for the UK grocery market, and has urged the inquiry team not to waste the opportunity to make a real difference to the future of consumer choice.

In the ACS’s final submission to the Competition Commission’s long-running investigation into the grocery market, chief executive James Lowman said: “Having found serious problems, not least that supermarkets’ buying terms are 16 per cent better than smaller competitors, it is not good enough for the inquiry to leave the problem unaddressed. This inquiry is still the best opportunity in a generation to deliver a fairer grocery market in the interest of consumers.”

The CC’s proposed buying power remedy - which called for an extension of the coverage of the existing Code of Practice to include all retailers generating over £1 billion of UK grocery turnover, the inclusion of two new clauses to the code and the creation of a retail ombudsman to oversee disputes under the new code - has been criticised by the ACS for failing to extend scope beyond the big four, for not toughening the clauses of the code enough and for limiting the remit of the ombudsman to react only to complaints from suppliers.

Lowman said: “The CC is in danger of repeating past mistakes, relying on only a slightly amended version of the existing broken code and creating a new ombudsman without any teeth. Our recommendation to the inquiry is to be bolder and create a code that will actually end the types of practices that force suppliers into unsustainable deals that harm the market, and with an ombudsman that can generate their own investigations, not wait for complaints.”

However, the ACS has broadly welcomed the CC's proposal to introduce a ‘competition’ test for new out-of-town supermarket developments. Following strong argument from the ACS, the CC rejected earlier suggestions to remove the ‘need’ test and reform the sequential test.

But Lowman added: “We welcome the commission’s overall position, but it should go further. The proposed 60 per cent market share threshold is too high, and should be reduced. Also, we believe that if a grocery company is dominant in a local market, the competition test should ban not only the building of new large stores, but the building of smaller ones as well. The competition test is about delivering real choice to consumers - one company running all the grocery outlets, big and small, is not choice.”

Topics