The OFT said the current system "can reasonably be suspected of restricting or distorting competition by raising the cost of, and also limiting the scope for, new local market entrants, particularly new large format stores". It also found that land holdings of the large supermarkets may reinforce their existing position in some areas, while restrictive covenants on sites sold had also come to light.
There was evidence to suggest that buying power of the big supermarkets had increased since 2000, and that the differential between suppliers& ' prices to large supermarkets compared with those to wholesalers and buying groups had risen. "There are reasonable grounds for suspecting this buying power could harm consumer choice."
There are also reasonable grounds for suspecting a distortion of competition from the large supermarkets' pricing behaviour, said the OFT. The OFT said "a CC market investigation would be able to examine in detail the effects these prices may be having".
The CC could recommend changes, including applying the code to all supermarkets; anonymity to protect suppliers who complain; and widening the code to include farmers and growers, not just direct suppliers to supermarkets, and overseas suppliers.
The planning system
Code of practice