ACS: Competition Commission Must Examine Market Power
09 Jun 2006
In its opening salvo of the Competition Commission's inquiry into the grocery market, the Association of Convenience Stores (ACS) has called for the Commission to focus on the market power of the largest four superstore groups.
ACS Director of Public Affairs, James Lowman, said: "The buying power of the superstores is the key factor which distorts competition in the market. We argue that the primary concern of the inquiry must be the way this market power is exploited through predatory pricing and price flexing, and through exploitation of the planning system."
ACS has submitted detailed comments to the Commission, and in doing so it is supported by the Federation of Wholesale Distributors (FWD) and the Scottish Grocers Federation (SGF), who have both joined the Community Shops Campaign Trust which is funding the work of the small stores sector. The paper was prepared in response to the Commission's request for views on the areas that should be covered in the inquiry, and ACS has emphasised:
• the changing face of the convenience store sector in the light of multiple expansion into it;
• the extent of the buying power of the big four grocery multiples;
• the way in which this power is used to sell goods below cost and to adopt predatory pricing strategies aimed at smaller retailers;
• the exploitation of the planning system by retailers who undermine local planning policies through their sheer financial clout.
James Lowman continued: "The Commission cannot get distracted away from the key economic issues. The big four multiple grocers control three-quarters of the market, and that gives them enormous power over their suppliers. Our core argument is that this power is exploited to the detriment of not only our members and other smaller retail and wholesale groups, but also to the detriment of consumers.
"This inquiry is a once in a generation opportunity to press for a level playing field in our market, and we would encourage all retailers to play their part, through supplying information on their own trading position, and also by giving financial support through the Community Shops Campaign Trust.
“Working with organisations like the SGF and the FWD, we have been able to adopt a professional and well-resourced approach to the inquiry, and this will allow us to make our voice heard despite the considerable investment we know the big four are making in fighting this inquiry."
ACS Director of Public Affairs, James Lowman, said: "The buying power of the superstores is the key factor which distorts competition in the market. We argue that the primary concern of the inquiry must be the way this market power is exploited through predatory pricing and price flexing, and through exploitation of the planning system."
ACS has submitted detailed comments to the Commission, and in doing so it is supported by the Federation of Wholesale Distributors (FWD) and the Scottish Grocers Federation (SGF), who have both joined the Community Shops Campaign Trust which is funding the work of the small stores sector. The paper was prepared in response to the Commission's request for views on the areas that should be covered in the inquiry, and ACS has emphasised:
• the changing face of the convenience store sector in the light of multiple expansion into it;
• the extent of the buying power of the big four grocery multiples;
• the way in which this power is used to sell goods below cost and to adopt predatory pricing strategies aimed at smaller retailers;
• the exploitation of the planning system by retailers who undermine local planning policies through their sheer financial clout.
James Lowman continued: "The Commission cannot get distracted away from the key economic issues. The big four multiple grocers control three-quarters of the market, and that gives them enormous power over their suppliers. Our core argument is that this power is exploited to the detriment of not only our members and other smaller retail and wholesale groups, but also to the detriment of consumers.
"This inquiry is a once in a generation opportunity to press for a level playing field in our market, and we would encourage all retailers to play their part, through supplying information on their own trading position, and also by giving financial support through the Community Shops Campaign Trust.
“Working with organisations like the SGF and the FWD, we have been able to adopt a professional and well-resourced approach to the inquiry, and this will allow us to make our voice heard despite the considerable investment we know the big four are making in fighting this inquiry."