The Commission barred supermarkets from using property deals to freeze out competitors with the introduction of its Groceries Market Investigations (controlled land) order 2010 last week. The crackdown is the latest measure to be implemented from the CC investigation into the grocery industry, which concluded in 2008.
Under the order, supermarkets must use "reasonable endeavours" to release existing restrictive covenants and not enter any new exclusivity arrangements. It follows the CC's investigation into more than 300 supermarket property deals, which involved either restrictive covenants or exclusivity arrangements. Of these it decided 251 did not restrict competition compared with 58 deals that did.
The CC's latest order prompted Shore Capital analyst Dr Clive Black to speak out, claiming restrictive covenants were not a "major distortive factor" in competition policy. He added the investigation was a waste of taxpayers' money as it had simply confirmed the sector is competitive.
"Has the CC written another chapter of Yes, Minister?" he said. "Does Joseph Heller's Catch-22 come to mind? I'm not convinced the taxpayer nor the consumer never mind the industry has benefited."
The Commission was quick to rebuke Black's concerns. "I think the point Black has missed again, like some others in the industry, is that judging groceries to be a broadly competitive market is not the same as giving it a complete clean bill of health," a spokesman said.
"It's nonsense to suggest we had any expectations before the inquiry," he added. "We don't initiate our inquiries and one particular reason for that is so we can approach our task without any preconceptions. Where we do take action, we have to justify it carefully in terms of benefits and cost."