Competition Commission reports on UK groceries market
The UK groceries market is delivering a good deal for consumers but action is needed to improve competition in a number of local markets and to address relationships between retailers and their suppliers, the Competition Commission (CC) has provisionally concluded.
In its provisional findings report, published today, the CC states that the UK groceries market is delivering a good deal for consumers and that the supply chain is healthy and innovative. However, in a limited number of areas, it has also identified concerns relating to local store choice. The CC is also concerned about the ability of grocery retailers to transfer excessive risk and costs to suppliers through various purchasing practices, such as retrospective changes to supply agreements.
The CC will now consider a range of measures to address these concerns before deciding on its final remedies. Options under consideration include the lifting of restrictive covenants and exclusivity arrangements on land holdings, and recommending changes to the planning system to place greater weight on competition and choice. The CC will also consider changes to the Supermarkets Code of Practice (SCOP), which regulates retailer-supplier relationships.
The CC is required to publish its final report by 8 May 2008. A summary of the provisional findings and possible remedies can be found on the CC’s website.
Frontier (London) advises Tesco.
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