The government’s verdict on the Competition Commission’s grocery inquiry has caused anger and relief in equal measure this week.

While retailers are welcoming the hands-off approach revealed this week by the Department for Business Enterprise & Regulatory Reform, supplier organisations and pressure groups all expressed anger that it did not go far enough.

Tesco appeal ‘success’ fury
Tesco’s appeal against the Competition Commission’s proposed competition test will delay implementation until April at the earliest. To the fury of ACS chief executive James Lowman, the government confirmed this week it would have to wait for the appeal’s outcome before acting further on the commission’s planning recommendations. Lowman branded the appeal an attempt to subvert the inquiry. “The government decision to defer action shows Tesco has been successful,” he said.

The three-day hearing will be heard by the Competition Appeals Tribunal, and will start on 11 November. If Tesco is unsuccessful, a competition test could be introduced as early as next April, according to a Commission spokesman.

ACS, Asda, M&S and Waitrose have all been given permission to have their say on the competition test at the hearing.
This week consumer affairs minister Gareth Thomas informed the commission of the action it planned to take on the back of its recommendations. In relation to the establishment of an ombudsman to oversee a strengthened Code of Practice, he confirmed the government would consider establishing the ombudsman itself if the supermarkets failed to create it voluntarily. However it said it would make any assessment based primarily on consumers’ best interests.

This caveat was welcomed by Asda. A spokesman for the retailer said this was important as it feared an ombudsman could have “unintended and damaging consequences”. “It is crucial that an ombudsman does not put extra pressure on retailers in relation to price, particularly in inflationary times when consumers are feeling the pinch.”

However those wishing for a tougher stance from the government were infuriated. They included LibDem MP Andrew George who accused the government of inviting the major supermarkets to challenge the commission’s recommendations. 

“The government needs to toughen its line,” he said. “By failing to give a guarantee that it will step in, this response is effectively an open invitation to the supermarkets to challenge the whole process and slow everything down in the hope government will lose interest.”

A spokeswoman for fair trade organisation Traidcraft said: “Since not even the supermarkets appealed the CC’s recommendation to establish an ombudsman, the government’s failure to commit to decisive action on behalf of consumers is inexplicable and indefensible.”