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Competition Commission report clobbered
The Competition Commission’s report into the future of the UK groceries market has been criticised by MPs and the Association of Convenience Stores (ACS) alike.
ACS chief executive James Lowman said, ‘What is absolutely clear is that the Competition Commission has not satisfied the concerns about the future of the market, and of local shops in particular.’
This view was supported by several MPs in a Commons debate on the issue, among them Labour’s David Drew, who was ‘disappointed’ by the report and notes that ‘competition alone will never sort out the grocery market, let alone retailing’.
While consumers are for the most part receiving the benefits of competition, the report suggests further measures need to be introduced to improve competition in local areas, including a ‘competition test’
for planning decisions relating to larger grocery stores. Other action points suggested were the prevention of land agreements that restrict entry by competitors, the establishment of a stronger Groceries Supply Code of Practice and the putting in place of an ombudsman to oversee and enforce the code.
While welcoming these aspects, the ACS claims the Competition Commission has uncovered evidence that demonstrates the anti-competitive effects of the buying power of the ‘big four’ (Tesco, Asda, Sainsbury’s and Morrisons), while it is also continuing to ignore significant ‘below-cost selling’ and aggressive pricing behaviour.
The overall failing, asserts the ACS, is that the ‘Commission views competition in the grocery market as competition between the big four retailers’.
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