However, David Greene, the solicitor leading the Association of Convenience Stores’ legal challenge against the OFT’s refusal to call for another inquiry into the dominance of the supermarkets, lodged this week, insisted the landmark class action was winnable but was likely to take nine months.
Greene, a partner at litigation specialist Edwin Coe, told The Grocer this week that a key plank of his submission to the Competition Appeal Tribunal would be to stress that the last market review in 2000 was hopelessly out of date.
“The first standalone Tesco Express was in 2002,” said Greene, “and Tesco, by its own admission, now has at least 6% of that market. Independents cannot compete against its buying power and that will be to the detriment of the consumer.
“The Competition Commission and the OFT have previously taken the view that this competition is driving down prices but that is not their only requirement to look after. They are also required to look at the effect on competition.”
Sainsbury, which ramped up its c-store clout by buying the Bells, Jacksons and Beaumont chains, is also set to be under the spotlight when the case goes before the CAT on November 1.
Green said: “The Commission raised the spectre of potential problems in grocery back in 2000, when it said practices such as price flexing were going on. Even though they were deemed not to be affecting competition at that point it said they needed to be kept under review.”
As The Grocer went to press, neither Tesco, which opens its 600th Express this month, nor Sainsbury could confirm whether they would bring their own evidence to the inquiry.
The ACS’s official class action came as the OFT continued to come under fire this week, including from the Tories at their party conference in Blackpool.
Shadow secretary of state for local government, Caroline Spelman, told a fringe meeting that the OFT’s decision not to order a review this summer had been “a real lapse” in thinking.
Meanwhile, Bob Surridge, MD of The Grocer Top 50 chain Anglian Convenience Stores, has written to Tony Blair challenging him to listen to smaller players. Surridge writes: “Sir Terry Leahy reportedly has ‘your ear’, but are you prepared to extend the same courtesy to a grassroots retailer? I can assure you my views are shared by many thousands of retailers, suppliers and members of the public.”
The All Party Parliamentary Small Shops Group said it had gathered all-written evidence for its own inquiry into the retail market. It will begin a series of hearings this month, which it hopes will help force the OFT and the government to carry out a full market review.
Meanwhile, the OFT has extended the notice for Tesco’s offer to acquire 21 former BP/ Safeway petrol stations from Morrisons. The OFT said that “the period for consideration of this notice has been extended by a period of 10 working days” and would expire on October 24.