ACS Urges Commission to Go Further
11 Mar 2008
ACS has made its final submission to the long running Competition Commission investigation into the Grocery Market Inquiry. ACS has criticised the Commission for being ‘timid’ in its proposed Remedies and urges the Inquiry team not to waste the opportunity to make a real difference to the future of competition and consumer choice in the market.
ACS Chief Executive James Lowman said: “Having found serious problems, not least that supermarkets buying terms are 16% better than smaller competitors, it is not good enough for the Inquiry to leave the problem unaddressed. This Inquiry is still the best opportunity in a generation to deliver a fairer grocery market in the interest of consumers."
ACS has commented on proposed Remedies in two areas. On planning the Commission has recommended the introduction of a ‘competition’ test for new out of town supermarket developments. Following strong argument from ACS, they did reject earlier suggestions to remove the ‘need’ test and reform the sequential test. ACS has broadly welcomed the planning recommendations.
On supplier issues ACS was critical that the remedy goes nowhere near far enough in addressing the problem of supermarket buyer power. The proposal is for an extension of the coverage of the existing Code of Practice to include all retailers over £1 billion of UK grocery turnover; the inclusion of two new clauses to the code and the creation of a retail ombudsman to oversee disputes under the new code. ACS criticises this approach for being poorly targeted in extending the scope beyond the big 4, for not toughening the clauses of the code enough and for limiting the remit of the ombudsman to react only to complaints from suppliers.
Mr. Lowman commented on the Commission’s supplier remedies: “The Commission is in danger of repeating past mistakes, relying on only a slightly amended version of the existing broken code and creating a new ombudsman without any teeth. Our recommendation to the Inquiry is to be bolder and create a code that will actually end the types of practices that force suppliers into unsustainable deals that harm the market and with an ombudsman that can generate their own investigations, not wait for complaints.”
Mr Lowman also commented on the Planning remedies: “We welcome the Commission’s overall position. However the Commission should go further. The proposed 60% market share threshold is too high and should be reduced. Also we believe that if a grocery company is dominant in a local market the competition test should ban not only the building of new large stores, but the building of smaller ones as well. The competition test is about delivering real choice to consumers, one company running all the grocery outlets, big and small, is not choice.”
Contacts:
Shane Brennan Public Affairs and Communications Manager
01252 515001/ 07921 372 978
Nina Collins Communications Coordinator
01252 515001
Michael Saxton/ Julie Kirby Grappa PR
020 7602 9222
Notes to Editors:
1. ACS (Association of Convenience Stores) is the voice of local shops, representing over 33,000 convenience stores. ACS helps local shops thrive through lobbying, support and networking opportunities.
2. The Competition Commission ‘Decision on Remedies’ was published on the 15th February 2008, deadline for all responses was 7th March 2008. http://www.competition-commission.org.uk/inquiries/ref2006/grocery/provisional_decision_remedies.htm
ACS Chief Executive James Lowman said: “Having found serious problems, not least that supermarkets buying terms are 16% better than smaller competitors, it is not good enough for the Inquiry to leave the problem unaddressed. This Inquiry is still the best opportunity in a generation to deliver a fairer grocery market in the interest of consumers."
ACS has commented on proposed Remedies in two areas. On planning the Commission has recommended the introduction of a ‘competition’ test for new out of town supermarket developments. Following strong argument from ACS, they did reject earlier suggestions to remove the ‘need’ test and reform the sequential test. ACS has broadly welcomed the planning recommendations.
On supplier issues ACS was critical that the remedy goes nowhere near far enough in addressing the problem of supermarket buyer power. The proposal is for an extension of the coverage of the existing Code of Practice to include all retailers over £1 billion of UK grocery turnover; the inclusion of two new clauses to the code and the creation of a retail ombudsman to oversee disputes under the new code. ACS criticises this approach for being poorly targeted in extending the scope beyond the big 4, for not toughening the clauses of the code enough and for limiting the remit of the ombudsman to react only to complaints from suppliers.
Mr. Lowman commented on the Commission’s supplier remedies: “The Commission is in danger of repeating past mistakes, relying on only a slightly amended version of the existing broken code and creating a new ombudsman without any teeth. Our recommendation to the Inquiry is to be bolder and create a code that will actually end the types of practices that force suppliers into unsustainable deals that harm the market and with an ombudsman that can generate their own investigations, not wait for complaints.”
Mr Lowman also commented on the Planning remedies: “We welcome the Commission’s overall position. However the Commission should go further. The proposed 60% market share threshold is too high and should be reduced. Also we believe that if a grocery company is dominant in a local market the competition test should ban not only the building of new large stores, but the building of smaller ones as well. The competition test is about delivering real choice to consumers, one company running all the grocery outlets, big and small, is not choice.”
Contacts:
Shane Brennan Public Affairs and Communications Manager
01252 515001/ 07921 372 978
Nina Collins Communications Coordinator
01252 515001
Michael Saxton/ Julie Kirby Grappa PR
020 7602 9222
Notes to Editors:
1. ACS (Association of Convenience Stores) is the voice of local shops, representing over 33,000 convenience stores. ACS helps local shops thrive through lobbying, support and networking opportunities.
2. The Competition Commission ‘Decision on Remedies’ was published on the 15th February 2008, deadline for all responses was 7th March 2008. http://www.competition-commission.org.uk/inquiries/ref2006/grocery/provisional_decision_remedies.htm