Elaine Watson
More than 20 small grocery chains have been asked to submit detailed information about their store locations and non-food offer to the Competition Commission as chairman Sir Derek Morris considers widening the scope of his probe into the Safeway bids.
Speaking at a public hearing into the proposed bids, Sir Derek said things had changed since the 2000 inquiry which had focused on competition between the top five grocers in stores over 15,000 sq ft.
Any new analysis of local competition might need to include the larger stores of companies outside the scope of the original inquiry, such as M&S and Waitrose, plus smaller grocery outlets and non-food retailers below the 15,000 sq ft threshold, he said. "We don't have a view on these things yet. Where does one draw the line? Can we draw from the market investigation of two years ago or not? A merger might create a competitive problem that was not a problem at all in 2000."
The Commission has written to all the multiples approached in the original 2000 inquiry, including chains such as Lidl, Budgens, Waitrose and Netto, to establish whether the parameters of the 2000 probe are still relevant. The chains have been sent a questionnaire asking them to outline the proportion of food to non-food sales in their estates and explain how they defined catchments and drive times, said one recipient. "A lot was covering the same ground as the last inquiry but bits of it, like the non-food, were new."
A statement outlining the key issues commissioners will consider in relation to any bids will be published this month.
News of a possible widening of the probe came as the Association of Convenience Stores and the Scottish Grocers' Federation urged Sir Derek to consider the impact of a Safeway sale on smaller chains.
Speaking at the hearing, ACS CEO David Rae said further consolidation could have an adverse impact on the independent sector: "There will be a divestment of stores if any bids are accepted. The most likely beneficiaries will be the unsuccessful bidders, which only strengthens their hand."
Extra buying power through the Safeway deal would also impact the convenience sector in the form of lower prices at the multiples' smaller stores, he warned. "This will bring extra buying power and focus it in the convenience market."
ceo Scott Landsburgh called for legislation to ban below-cost selling and ensure transparency on invoicing and volume discounting.
>>p31 The price of victory
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More than 20 small grocery chains have been asked to submit detailed information about their store locations and non-food offer to the Competition Commission as chairman Sir Derek Morris considers widening the scope of his probe into the Safeway bids.
Speaking at a public hearing into the proposed bids, Sir Derek said things had changed since the 2000 inquiry which had focused on competition between the top five grocers in stores over 15,000 sq ft.
Any new analysis of local competition might need to include the larger stores of companies outside the scope of the original inquiry, such as M&S and Waitrose, plus smaller grocery outlets and non-food retailers below the 15,000 sq ft threshold, he said. "We don't have a view on these things yet. Where does one draw the line? Can we draw from the market investigation of two years ago or not? A merger might create a competitive problem that was not a problem at all in 2000."
The Commission has written to all the multiples approached in the original 2000 inquiry, including chains such as Lidl, Budgens, Waitrose and Netto, to establish whether the parameters of the 2000 probe are still relevant. The chains have been sent a questionnaire asking them to outline the proportion of food to non-food sales in their estates and explain how they defined catchments and drive times, said one recipient. "A lot was covering the same ground as the last inquiry but bits of it, like the non-food, were new."
A statement outlining the key issues commissioners will consider in relation to any bids will be published this month.
News of a possible widening of the probe came as the Association of Convenience Stores and the Scottish Grocers' Federation urged Sir Derek to consider the impact of a Safeway sale on smaller chains.
Speaking at the hearing, ACS CEO David Rae said further consolidation could have an adverse impact on the independent sector: "There will be a divestment of stores if any bids are accepted. The most likely beneficiaries will be the unsuccessful bidders, which only strengthens their hand."
Extra buying power through the Safeway deal would also impact the convenience sector in the form of lower prices at the multiples' smaller stores, he warned. "This will bring extra buying power and focus it in the convenience market."
ceo Scott Landsburgh called for legislation to ban below-cost selling and ensure transparency on invoicing and volume discounting.
>>p31 The price of victory
{{NEWS }}
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