The Office of Fair Trading (OFT) has caved into pressure and will step-up its review of the grocery sector, but independent retailers should not expect special consideration.
The decision follows calls on the OFT from the Association of Convenience Stores and MPs on the all-party parliamentary group for small shops to halt what it regards as foul play in the major multiples’ increasing monopoly of the market.
The OFT said it would request the four big retailers and other associated parties to submit further evidence before it delivers a report on whether to present the £120bn-a-year market to the Competition Commission in April.
However, chief executive John Fingleton said there was no guarantee that the OFT would launch a full enquiry.
And he emphasised that his objective was to sanction fair competition, rather than offering weighted protection to “less efficient” operators in the sector.
Fingleton said: “We do not and will not hesitate to take action under competition legislation when it is warranted. Let me stress that this legislation is to protect competition not competitors.”
Difficulty for individuals or groups of competitors does not always cause harm to competition or consumers, he added.
The Association of Convenience Stores, which represents 32,000 shopkeepers, said it was troubled by Fingleton’s dismissal of its suggestion that big chains unfairly undercut competitors with heavy discounting and couponing.
“In some instances, the likes of Tesco have offered 40 per cent discount vouchers on shopping when they enter a new market and that can put local players out of business.
“We think that is something the OFT should take action on,” it said.
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