The association has written to the Office of Fair Trading calling for an inquiry because it claims that supermarkets have been allowed to dominate the grocery and convenience store sectors.
It added that if the supermarket and c-store sectors were examined as one market, Tesco, for example, would have a share close to 40%, which would automatically trigger an inquiry.
The FSB’ calls come just two weeks after an all-party inquiry into the future of the UK high street concluded that a regulator should be appointed to undertake a full investigation into the retail sector.
The industry is also waiting on the Office of Fair Trading to decide whether to refer the grocery industry to the Competition Commission for a full market review.
Clive Davenport, FSB trade and industry chairman, said: “Such domination of a vital part of UK commercial and family life, based on overly-favourable government policy decisions and unfair trading practices, cannot be allowed to stand.”
He added: “With a full and open inquiry now, a balance can be found where supermarkets and small shops can co-exist, providing value for all customers.”