The Supermarkets Code of Conduct may soon be replaced by the Grocery Supply Code of Practice. But what difference would it make?
The Competition Commission's report on the grocery market begs only one question - if implemented, what difference would it make? History and common sense say not much.
The two previous reports in 2000 and 2003 concluded, as this one did, that consumers were being well served by competition in the grocery market. The only change of note in the 2000 report was the Supermarkets Code of Conduct, which has to some extent constrained the behaviour of the big four, but otherwise simply increased the volume of complaints.
The 2003 report effectively endorsed the status quo by refusing to allow Sainsbury's or Asda to bid for Safeway. The 2008 report observes that Tesco does nothing that cannot be challenged by its competitors. However, it overlooks the fact that without at least two big acquisitions, (which would be blocked anyway) neither the second nor third players could achieve Tesco's economies of scale in the UK market.
The 2008 report repeats the 2000 report's advocacy of a competition test for new stores in localities where there is one dominant player. This would involve the OFT in local planning decisions, an idea mooted in 2000 and rejected by the DTI. Even if it gets the go-ahead, it will have to operate within the "town centre first" framework. Most shoppers won't see any change.
But what about smaller suppliers? Doesn't the new Grocery Supply Code of Practice give them important new rights? Maybe. The right not to be de-listed or lose business simply for complaining is fine - but it was never a real threat in the first place.
The much-touted answer is anonymity. So the commission's proposed ombudsman would, in addition to resolving disputes between known parties, be able to gather "confidential" complaints from suppliers .
The ombudsman would also be empowered to take complaints from farmers alleging breaches of the code that, they say, have had a direct or indirect effect on their business. Sounds like a whingers' charter.
In a dissenting note, Commission member Professor Bruce Lyons, drawing on German experience, argued that investigations would in practice reveal identities. Will nervous suppliers be persuaded to complain? I doubt it.
As Hotspur retorted, when Glendower boasted, in Henry IV Part I, that he could "call forth spirits from the vasty deep," "Why, so can I, or so can any man; but will they come when you do call for them?"n
Kevin Hawkins is an independent retail consultant