Two bodies have launched initiatives to force the Office of Fair Trading to revisit its investigation into what they see as the anti-competitive expansion of the UK supermarket sector.
Firstly, the Association of Convenience Stores (ACS) has launched a formal appeal to the Competition Appeals Tribunal (CAT) against the Office of Fair Trading’s decision to dismiss the formal request for a full investigation of the grocery market issued in August this year.
ACS chief executive David Rae said: “ACS has lodged a formal complaint against the Office of Fair Trading because we cannot allow the legitimate and detailed concerns of the independent retail sector to be dismissed as they were. The OFT failed to properly consider the arguments and evidence presented by ACS members, and thereby failed in its obligations under the Enterprise Act 2002.
“Our evidence showed that consumers are concerned at the unchecked growth of the major multiples at the expense of independent shops. We demonstrated that buyer power was distorting the market, undermining competition and leading to consumer detriment.
“The OFT’s flawed consideration of this evidence has led to erroneous conclusions on below cost selling, price flexing and the acceleration of convenience store acquisition by the major multiple retailers. These conclusions will be challenged.
“ACS does not take this action lightly, we believe that the OFT must be called to account. Furthermore we cannot allow these issues that are fundamental to the future of the grocery market to be dismissed.”
Meanwhile, UK lobby group, the Forum of Private Business, has called for a government inquiry into what it calls the supermarkets' monopoly of the retail market.
The move by the FPB, which said the British high street has lost 20,000 independent shops since 1997 at a rate of 50 a week, comes as Tesco plans to open its first non-food store in Manchester this month.
“The supermarkets’ - and in particular Tesco's - dominance of retail trade is a catastrophe for the high street right here, right now in virtually every town in Britain," said the FPB’s chief executive Nick Goulding.
“The government needs to wake up and see the crisis that is affecting small businesses.
To protect these business’s livelihoods there needs to be another Competition Commission inquiry,” he said, adding that high street shops are unable to compete with the multi-million pound advertising budget of the supermarkets.
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