UK grocery retailers are delivering a good deal for consumers, but action is needed to improve competition in local markets and to address relationships between retailers and their suppliers, the Competition Commission has concluded.
In its final report concluding its two-year investigation into the groceries market, the commission said it would recommend a ‘competition test’ in planning decisions on larger grocery stores.
It would also recommend action to prevent land agreements which can restrict entry by competitors, the creation of a new strengthened and extended Groceries Supply Code of Practice and to establish an independent Ombudsman to oversee and enforce the Code.
“In many important respects, consumers are receiving the benefits of competition, such as value, choice, innovation and convenience, but we need to take appropriate action to address those areas where they could be served better and where their interests could be damaged in future,” said Peter Freeman, chairman of the commission and inquiry group chairman.
“The changes to the existing Code of Practice, along with the recommendation of an independent Ombudsman to police the code, aim to improve the existing system by making it more robust and proactive in tackling those practices which can damage investment by suppliers,” he said.
“Although, in many areas, there is a good choice and strong competition between retailers, there are also a significant number of local areas where larger grocery stores face limited competition and local shoppers lose out,” he added.
“That is why we want to see the introduction of a competition test as part of the planning regime to prevent local areas developing like this in the future. We are also taking action to prevent retailers using restrictive covenants and other agreements to frustrate entry by competitors in such areas.”
Read the Competition Commission’s full report.
For more details, see The Grocer on Saturday.
In its final report concluding its two-year investigation into the groceries market, the commission said it would recommend a ‘competition test’ in planning decisions on larger grocery stores.
It would also recommend action to prevent land agreements which can restrict entry by competitors, the creation of a new strengthened and extended Groceries Supply Code of Practice and to establish an independent Ombudsman to oversee and enforce the Code.
“In many important respects, consumers are receiving the benefits of competition, such as value, choice, innovation and convenience, but we need to take appropriate action to address those areas where they could be served better and where their interests could be damaged in future,” said Peter Freeman, chairman of the commission and inquiry group chairman.
“The changes to the existing Code of Practice, along with the recommendation of an independent Ombudsman to police the code, aim to improve the existing system by making it more robust and proactive in tackling those practices which can damage investment by suppliers,” he said.
“Although, in many areas, there is a good choice and strong competition between retailers, there are also a significant number of local areas where larger grocery stores face limited competition and local shoppers lose out,” he added.
“That is why we want to see the introduction of a competition test as part of the planning regime to prevent local areas developing like this in the future. We are also taking action to prevent retailers using restrictive covenants and other agreements to frustrate entry by competitors in such areas.”
Read the Competition Commission’s full report.
For more details, see The Grocer on Saturday.
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