The UK’s top two supermarkets reacted with casual arrogance to the Competition Commission (CC) announcement that it will be investigating retailer/supplier relationships.
The CC has bowed to pressure from organisations such as the National Farmers Union and Greengrocers Campaigner and will now probe dealings with suppliers and other competitive practices in the remit of its inquiry into the UK grocery supermarket sector.
An Asda statement said: “We’ve got nothing to hide and look forward to working with the CC to show them how we do things differently at Asda.” The retailer said it still feels the referral was unnecessary but is pleased that the planning issue is being addressed - Asda has fewer stores and no land bank to rival the scale of Tesco’s.
A Tesco spokesman said: “We are pleased that the CC has promised a swift treatment of the inquiry but actually the terms of reference haven’t changed since the OFT’s referral to the CC. As far as looking into the supply chain is concerned, we have been investigated two or three times in the last few years and been given a clean bill of health and we have no reason to believe that won’t be the case this time round.”
The CC published an issues statement that identifies the specific questions and areas the inquiry intends to examine. It will investigate if any features of the market prevent, restrict or distort competition and if so, what action might be taken to remedy these.
The full statement is available on the CC website - competition-commission.org.uk - and identifies a number of issues including the supply chain, as well as retail competition in local markets and the planning regime.
Peter Freeman, CC chairman, said: “We are sure that all parties will be as keen as us on a swift conclusion - we trust we can rely on their co-operation to achieve this.
“For us to do our job properly, we need people to come forward and provide us with evidence. Many parties have already helped us by sending in evidence and I would urge other people to come forward.”
Christine Fisher of independent retailer group Greengrocers Campaigner said: “We put our case to the CC from the consumer point of view so whether they have reacted to that I don’t know, but greengrocers are continuing to close and the rate is speeding up. If the CC is going to stop this complete wipeout and leave consumers with any choice, then it is going to have to get a move on.”
Growers too are pleased at the extended remit. “Our greatest fear was that this would just be confined to the issues of convenience stores and land banks,” said Robin Tapper, head of food and farming at the National Farmers’ Union. “We had pressed for a full inquiry so we are delighted that the CC has decided to do it. In the farming sector, the lemon has been squeezed too tightly and the pips are more than squeaking now.”
Other suppliers are more sceptical. “I am not getting excited about it,” said one importer and packer who preferred to remain anonymous. “I don’t think this body’s got any teeth. Once or twice they have stood up at conferences and it all sounds very good, but will they actually be able to do anything? I think the answer is no. No suppliers will come forward. The occasional time people do get on their soapbox, it is so rare that they have the strength or the conviction to actually do anything.”
The CC is required to publish its final report by May 8, 2008, but is aiming to complete its work by October 2007. To submit evidence, email: Groceries@cc.gsi.gov.uk
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