ACS Welcomes "Watershed" Examination of Grocery Market
09 May 2006
Today’s announcement from the Office of Fair Trading (OFT) that they will refer the grocery market for detailed consideration by the Competition Commission has been welcomed by the Association of Convenience Stores (ACS).
ACS Chief Executive David Rae said: “This is a watershed inquiry for our industry.”
As the champion of the independent and neighbourhood retail industry, ACS led the campaign for an inquiry into the market. After applying for a market review in November 2004, ACS successfully appealed the OFT’s decision not to refer the market to the Competition Commission. It was that appeal that has directly led to the OFT’s re-consideration of the market and today’s decision to refer the industry to the Competition Commission. Today’s full written decision makes frequent references to the evidence submitted by ACS.
David Rae continued: “The grocery market needs to be looked at. The buying power of the major multiples skews the market in their favour, and means that scale, not retailing skill, is the critical factor for succeeding in the market. This enormous buying power is now being brought into direct competition with independent retailers, and the OFT have acknowledged this entry of the superstores into the convenience sector as one of the reasons for referring the market.
“We believe the Commission should identify remedies to ensure transparent buying prices, to tackle predatory pricing, and to better control acquisitions in the convenience store sector. Measures such as this could help to promote a more diverse grocery market for the benefit of consumers.
“The scope of the Competition Commission inquiry will be critical. In particular, we will continue to make our case for the inclusion of fuel sales as part of the Competition Commission inquiry. Petrol forecourt stores have suffered as a result of the superstores’ expansion, and the tactics used by large retailers in fuel pricing should be considered in detail.
“The industry now faces up to two years of intense scrutiny. ACS will fully engage with the inquiry and assist the Competition Commission in whatever ways we can. We encourage all members of the independent and convenience store sector to support this work through contributing to the Community Shops Campaign Trust.”
ACS Chief Executive David Rae said: “This is a watershed inquiry for our industry.”
As the champion of the independent and neighbourhood retail industry, ACS led the campaign for an inquiry into the market. After applying for a market review in November 2004, ACS successfully appealed the OFT’s decision not to refer the market to the Competition Commission. It was that appeal that has directly led to the OFT’s re-consideration of the market and today’s decision to refer the industry to the Competition Commission. Today’s full written decision makes frequent references to the evidence submitted by ACS.
David Rae continued: “The grocery market needs to be looked at. The buying power of the major multiples skews the market in their favour, and means that scale, not retailing skill, is the critical factor for succeeding in the market. This enormous buying power is now being brought into direct competition with independent retailers, and the OFT have acknowledged this entry of the superstores into the convenience sector as one of the reasons for referring the market.
“We believe the Commission should identify remedies to ensure transparent buying prices, to tackle predatory pricing, and to better control acquisitions in the convenience store sector. Measures such as this could help to promote a more diverse grocery market for the benefit of consumers.
“The scope of the Competition Commission inquiry will be critical. In particular, we will continue to make our case for the inclusion of fuel sales as part of the Competition Commission inquiry. Petrol forecourt stores have suffered as a result of the superstores’ expansion, and the tactics used by large retailers in fuel pricing should be considered in detail.
“The industry now faces up to two years of intense scrutiny. ACS will fully engage with the inquiry and assist the Competition Commission in whatever ways we can. We encourage all members of the independent and convenience store sector to support this work through contributing to the Community Shops Campaign Trust.”