The Competition Commission continues to investigate the groceries market after the OFT made a market reference to it in May 2005. Recent publication of the Competition Commission's 'emerging thinking' makes better reading for the supermarkets than for the anti-supermarket lobby.
Regulatory scrutiny of the power wielded by the large supermarket chains continues to rumble on with the Competition Commission (the CC) issuing its 'emerging thinking' on 23 January 2007. The CC is investigating the groceries market after the Office of Fair Trading, under pressure from, in particular, the Association of Convenience Stores, made a market investigation reference to it in May 2006.
The CC has signalled that its investigation will focus on what choices shoppers have in particular areas and how competition works between retailers of different sizes, including the use by the large supermarket chains of 'land banks' to prevent competitors entering a local market. In addition, the CC will continue to investigate the relationship between the supermarkets and their suppliers, in particular whether smaller retailers are paying higher prices to grocery suppliers than the larger supermarket chains.
Generally, the CC's emerging thinking makes better reading for the supermarkets than for the anti-supermarket lobby. The CC robustly states that it is not 'here to punish success or individual retailers' and has found that the 'bigger buyers do not always appear to get better terms from suppliers'. However, these are provisional findings, and the CC is actively urging interested parties to continue to make representations to it over the next couple of months.
The key focus of the enquiry is likely to be the issue of landbanks and how they alter local competition.
The CC aims to publish its provisional findings in June 2007 and its final report in November 2007.