Any further growth in the power of the big four supermarkets could harm consumers, Müller Dairy UK has told the Competition Commission.

In a letter to the Commission's grocery inquiry team, the yoghurt manufacturer's supply chain director, Hayward Green, said the market for groceries was highly competitive - to the benefit of shoppers.

"In our view, the present market structure and current market practices broadly achieve a balance of the interests of the UK consumer, suppliers and retailers."

But Green warns the Commission of potential "dangers" further down the line. "Further material consolidation in the market, either by consolidation amongst the supermarkets, or further consolidation in the convenience sector or the 'secondary' grocery shopping market generally, may present real future dangers for the UK consumer in restricting choice and competitiveness.

"If the four major retailers continue to expand across all other distribution channels, given their combined market strength, their need for revenue growth may, in the end, negatively impact on the consumer's breadth of choice and quality of shopping experience."

Green was unavailable for further comment. Müller's comments come as the industry gears up for the publication of the inquiry team's emerging thinking document. It is unclear when this will appear - though sources indicated it would be in the week beginning 15 January.

A source close to the inquiry said expectations of something concrete to tackle the power of the supermarkets would be high.

"Either they've got to come out and say there's no evidence, or they've got to say there is. The middle ground was covered in the last inquiry with measures such as the code of practice."

Another source said he understood the Commission would propose a regulator with the power to force supermarkets to open their books.