from Alan Toft, DG, Federation of Wholesale Distributors
Sir; It would be helpful if we could enlist your help to clarify the objective and process involved in the federation’s call for a moratorium on superstore acquisitions in the convenience store sector.
Misunderstandings have arisen which could muddy the waters. FWD seeks a suspension - another word for moratorium - of non-organic superstore growth by small store acquisition for 12 months. In that time the government would review the total food and drinks marketplace.
During the moratorium every facet of consumer and trade opinion on the future framework of the market would be consulted so that consumer and community interest - which is the real test - could be identified and safeguarded.
Indeed, the terms of reference for the moratorium itself would be hammered out by the Competition Commission.
It would centre on the Big Four, which are the source of all the current controversy. The status of the Co-op Group would need to be considered too. Smaller multiples and independents wishing to buy or sell would not fall into the moratorium net.
This could result in stronger non-Big Four groupings, thus redressing some of the imbalance in the market.
Surely what is required is the application of a brake on the current rush-to-buy tactics of the superstores which are pushing the price of a small store up to levels which are a barrier to entry for those without bottomless resources.
We believe that an orderly review of the market cannot take place at the same time as ongoing superstore acquisition activity and that only a suspension of this activity could provide the foundation for a review of integrity.
There may be other ideas on the form that a moratorium could take and no doubt we will hear about these in due course.
The crucial issue is that a moratorium is an imperative.
Sir; It would be helpful if we could enlist your help to clarify the objective and process involved in the federation’s call for a moratorium on superstore acquisitions in the convenience store sector.
Misunderstandings have arisen which could muddy the waters. FWD seeks a suspension - another word for moratorium - of non-organic superstore growth by small store acquisition for 12 months. In that time the government would review the total food and drinks marketplace.
During the moratorium every facet of consumer and trade opinion on the future framework of the market would be consulted so that consumer and community interest - which is the real test - could be identified and safeguarded.
Indeed, the terms of reference for the moratorium itself would be hammered out by the Competition Commission.
It would centre on the Big Four, which are the source of all the current controversy. The status of the Co-op Group would need to be considered too. Smaller multiples and independents wishing to buy or sell would not fall into the moratorium net.
This could result in stronger non-Big Four groupings, thus redressing some of the imbalance in the market.
Surely what is required is the application of a brake on the current rush-to-buy tactics of the superstores which are pushing the price of a small store up to levels which are a barrier to entry for those without bottomless resources.
We believe that an orderly review of the market cannot take place at the same time as ongoing superstore acquisition activity and that only a suspension of this activity could provide the foundation for a review of integrity.
There may be other ideas on the form that a moratorium could take and no doubt we will hear about these in due course.
The crucial issue is that a moratorium is an imperative.
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