LibDem MP Colin Breed, who helped spark off the original Competition Commission inquiry into the supermarkets, has now accused the big four supermarkets of acting as a "classic complex monopoly" in a new report.
Checking out the Supermarkets II' is a follow-up to his study in 1998, and has been published as the Competition Commission inquiry into bids for Safeway moves to its next phase.
Breed said: "Suppliers and consumers alike, as well as individual shop owners, are being short-changed by a government that refuses to focus on the effects of the dominance of supermarkets. Something must and can be done. The government must act now."
His report says: "Cosy co-existence rather than real competition often seems to characterise the relationship between the leading chains. They act in remarkably similar ways."
It points out the Fair Trading Act defines complex monopolies' as where a group of firms, which together have 25% or more of the market, all behave in some way that adversely affects competition'. The OFT says complex monopolies can exist even if the companies involved do not have an explicit agreement to co-operate'. Breed's report calls on the Commons Select Committee on Trade and Industry to inquire into the dominance of the major chains and revise competition law to reflect local and regional monopolies. The merit of the food industry being dominated by a few large multinationals, with vertically integrated operations controlling all stages of the food chain, is debatable, it says.
Breed said: "The situation is graver than many imagine, and the consequences reach far into every aspect of our lives, from obtaining medicines to having access to healthy foods."
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Checking out the Supermarkets II' is a follow-up to his study in 1998, and has been published as the Competition Commission inquiry into bids for Safeway moves to its next phase.
Breed said: "Suppliers and consumers alike, as well as individual shop owners, are being short-changed by a government that refuses to focus on the effects of the dominance of supermarkets. Something must and can be done. The government must act now."
His report says: "Cosy co-existence rather than real competition often seems to characterise the relationship between the leading chains. They act in remarkably similar ways."
It points out the Fair Trading Act defines complex monopolies' as where a group of firms, which together have 25% or more of the market, all behave in some way that adversely affects competition'. The OFT says complex monopolies can exist even if the companies involved do not have an explicit agreement to co-operate'. Breed's report calls on the Commons Select Committee on Trade and Industry to inquire into the dominance of the major chains and revise competition law to reflect local and regional monopolies. The merit of the food industry being dominated by a few large multinationals, with vertically integrated operations controlling all stages of the food chain, is debatable, it says.
Breed said: "The situation is graver than many imagine, and the consequences reach far into every aspect of our lives, from obtaining medicines to having access to healthy foods."
{{NEWS }}
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