Tesco has launched a legal challenge to planning proposals from the Competition Commission that would prevent it opening new stores in areas where it already controls more than 60 per cent of the market.
The UK’s largest retailer is appealing against the commission’s recommendation, following its two-year investigation into the UK grocery market, for a ‘competition test’ to prevent any one retailer gaining a virtual monopoly in an area.
Tesco claims that, as the commission said the grocery sector is overall highly competitive, launching a competition test would be an excessive response that would place too much planning power in the hands of regulators instead of local authorities and would lead to unnecessary delays.
In a three-day hearing, Tesco will argue before the Competition Appeal Tribunal (CAT) that the test is unlawful.
But the move pits Tesco against Marks & Spencer, Asda, Waitrose and the Association of Convenience Stores, all of which support the commission.
Tesco may have a strong case, according to competition lawyers, as it could argue the competition test would fail to relieve many of the problems identified in the commission’s report.
A verdict on the case may not be reached for at least three months, press reports speculate. The implementation of the test may not be effective until 2009.
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