Independent retailers and wholesalers are drawing up the next battle lines in their ongoing fight with the major supermarkets after receiving some stark wake up calls at this week’s Federation of Wholesale Distributors conference.
Competition solicitor Michael Hutchings was among the key speakers outlining where the fight now lies as more than 200 delegates gathered at The Belfry near Birmingham.
Speaking in the week after Tesco became the first British retailer to post a profit of more than £2bn, Hutchings warned there was nothing to suggest that the competition authorities, including the OFT, were about to change their views on the power of the multiple retailers.
However, he said there were still areas where the independent sector may be able to push its case, including
lobbying for the secretary of state for trade and industry, Patricia Hewitt, to use special powers to intervene in competition issues.
The government also has the power to put the supermarkets code of practice on the statute books.
“Competition law ultimately has to be about consumer issues and consumer welfare, which is generally taken to mean price, so the OFT inevitably focuses on that,” said Hutchings.
“But it is also about how competitors and suppliers are affected. In European cases, the Commission has looked downstream towards consumers and upstream towards suppliers and that is what the OFT should do from now on. Then you can say that the issue is buyer power and whether that is leading to a lessening of competition.”
One fruitful area for lobbyists, he said, would be to campaign against the multiples’ vertical integration of the supply chain where they could be argued to be controlling prices.
“It would be possible to say the supermarkets are acting in an anti-competitive way by integrating retailing and wholesaling because the independents do not have access to a substantial part of the wholesale market,” said Hutchings. “The OFT has not looked at that issue, which would be really controversial.”
Local planning issues, such as a town’s only car park being under the control of a multiple, could also provide a useful lobbying tool, added Hutchings.
He told conference delegates they had to “stand up and be counted” by going public with their complaints.
Simon Mowbray