Small shop leaders have rounded on the Competition Commission after it dismissed as limited the so-called 'waterbed effect' in grocery - and declared that convenience store numbers were in fact on the rise. The Association of Convenience Stores admitted it was left "spitting" by two working papers published by the Commission's groceries market inquiry team this week. In one, on the waterbed theory - that suppliers squeezed by supermarkets charge wholesalers more to make up margins - the Commission said it had considered evidence from the Association of Convenience Stores, Tesco and Sainsbury's, but concluded: "Any waterbed effect is likely to be of limited impact in the markets that are the subject of the present market investigation." In addition, it remained unconvinced that, even if there were such an effect, it should be an issue for concern. There was, it said, "no evidence that consumers in the UK markets for grocery retailing have been adversely affected as a result of any possible waterbed effect". But a separate working paper produced by the Commission on supplier pricing revealed big multiples were achieving preferential terms of up to 13% compared with wholesalers. ACS chief executive James Lowman said: "It remains our view that supplier discrimination takes place in grocery and it is a result of the distorting effect of the overwhelmingly dominant position of the four biggest retailers." The Commission insisted it was not the case that large retailers always secured better terms than smaller operators. Meanwhile, the ACS was also left fuming by the Commission's decision to base its understanding of the state of c-stores on an Experian Goad study indicating the numbers of convenience stores in town centres. In a working paper on the entry and exit of small and specialist stores in grocery, the Commission said the research showed the growth of c-stores owned by the major grocery retailers was being mirrored by the growth of non-affiliated independent c-stores. But Lowman said because it omitted stores from key locations for independents, such as suburbs and rural villages, the Experian Goad study was "so limited as to be useless". He said the Commission should instead have based its analysis on Knowledge Store/IGD data, which covers the entire grocery market. This recorded a decline in c-store numbers by 1.4% during 2006, including a fall in numbers of non-affiliated independents to the tune of 5.3%. n Tesco is to request a meeting with the Commission to discuss its assertion that it holds "strategic" land holdings in areas where it has high market share. In a working paper on land holdings, the Commission said: "Such a pattern of behaviour is consistent with the strategic holding of land to prevent entry [of competitors] into areas of stength." The Commission claimed rivals Sainsbury's and Asda did not engage in similar practices. But Tesco insisted that its own evidence did not support the Commission's conclusions.