Watchdog seeks quick supermarket inquiry
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Your support makes all the difference.The Competition Commission is to conduct a surprisingly wide-ranging inquiry into the £95bn grocery market, the watchdog revealed yesterday.
The commission, which is publishing a "statement of issues", also promised to run a speedy inquiry into supermarkets - with the final report published by October next year.
It will include a full-scale investigation of the behaviour of supermarkets towards their suppliers - an issue that had been comprehensively explored by the commission already in its report in 2000.
Among the points that will be explored will be "whether the behaviour of grocery retailers towards their suppliers threatens the economic viability of suppliers or wholesalers".
The other two themes of the investigation will be the nature of competition between retailers, and how the planning regime and ownership of land affects competition.
The commission's investigation comes after the Office of Fair Trading initially resisted the call for a full-scale inquiry. The Association of Convenience Stores (ACS) was forced to mount a successful legal challenge to the OFT after it decided in August last year not to refer the matter to the Competition Commission. The OFT finally referred the supermarkets last month in a move focused on the planning issue.
David Greene, the solicitor for the ACS, said: "This inquiry is broader than we originally thought the OFT was recommending. It is to be a comprehensive investigation. That's a huge turnaround from the situation in August 2005."
The commission also said that, although it would not look at the sale of non-grocery goods, such as petrol, CDs and books, it would "identify features which affect competition in any market in which grocery suppliers". This gave hope to the ACS that the investigation would encompass the way in which selling of petrol and CDs leads to increased footfall for supermarkets - goods that smaller stores cannot stock.
The commission warned that it will stick to competition issues only and that it had no remit to explore subjects of more general public interest - which have been raised by some of the most vocal critics of supermarkets.
"Unless they affect competition, issues such as the environmental impact of the grocery supply chain, the composition of the high street and its impact on communities, rural land usage or employment conditions in overseas suppliers are not things we can decide on," the commission said.
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