Hot topics in competition and regulation
Frontier has today published two new bulletins on issues that have recently generated a great deal of interest, not only amongst our clients but also more widely in the media.
In Back to the future we explore the issues raised by the UK Competition Commission’s recently concluded grocery inquiry. In May 2006, the Office of Fair Trading (OFT) referred the groceries sector to the Commission, highlighting concerns that included pricing, the effect of buyer power on the viability of wholesalers, and the linked issues of supermarkets’ land holdings and the planning system. In April 2008, the Commission rejected most of these concerns. Instead, it re-addressed issues it had focused on in the 2000 supermarkets inquiry, where its recommended remedies had either not been imposed, or had not been as effective as hoped.
In Mail orders we present the results of our work for the UK Postal Services Commission, who asked Frontier to analyse the net costs to Royal Mail of several different elements of its “universal service obligation”(USO). Of the features we reviewed, we found that only the requirement for Saturday collections and deliveries imposed a substantial net cost on Royal Mail, but even this was no greater than the savings it could achieve, in a four-year period, by improving efficiency by 1% a year.
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