CAMPAIGNERS today dismissed a report into supermarket dominance of the grocery sector as a "failure", saying it will do little to protect consumers or independent retailers.
The Competition Commission unveiled a planning shake-up in a bid to boost competition in the £95 billion grocery market.
The culmination of the two-year probe into the sector will see a new 'competition test' in planning decisions on larger stores
as well as action to prevent land agreements restricting competitors from entering the market.
It also recommends a new independent ombudsman who will enforce a strengthened code of practice to protect suppliers, governing all grocery retailers with a turnover greater than £1bn.
The UK's four biggest supermarkets – Tesco, Sainsbury's, Asda and Morrisons – all came under scrutiny in the investigation. The commission said: "Although, in many areas, there is good choice and strong competition between retailers, there are also a significant number of local areas where larger grocery stores face limited competition and local shoppers lose out."
Measures include involving the Office of Fair Trading (OFT) in all planning applications for new grocery stores bigger than 1000 square metres. Restrictive covenants, which retailers can use to prevent competitors building new stores, will also be lifted or face scrutiny.
Retailers will not be allowed to retrospectively change their agreements with suppliers or shift risks and costs on to them, and will have to enter into arbitration to resolve disputes.
The report said consumers were benefiting from the intense rivalry between stores and concluded that independent retailers were "not in terminal decline".
But the Association of Convenience Stores (ACS) criticised the report as a "failure".
James Lowman, ACS chief executive, said: "The overriding failing of this inquiry is that the Commission views competition in the grocery market as competition between the big four retailers.
"This approach ignores the critical need for a variety of retailers and supply chains. It is out of kilter with consumer trends towards more local shopping."
Friends of the Earth supermarkets campaigner Sandra Bell said the report did not go far enough.
She said: "This report confirms that the 'big four' supermarkets are the bully boys of the retail sector, bleeding suppliers dry and reducing shoppers' choice.
"These remedies cannot be left up to the supermarkets to weaken and then sign up to. The supermarket watchdog needs to be appointed by Government and it needs teeth."
Asda chief executive Andy Bond said: "The commission's proposals could cost the industry hundreds of millions, leading to higher prices for customers."
The full article contains 425 words and appears in Edinburgh Evening News newspaper.
