ACS Makes Case to the Competition Commission Inquiry
22 Sep 2006
The Association of Convenience Stores (ACS) has laid down the three major tenets in its fight to protect independent retailers as part of its main submission to the Competition Commission Inquiry. A formal hearing will take place on September 26th, and the ACS’s submission sets out in detail the competition issues in the market place and makes a case for action.
The three key issues are:
1) The competition authorities have been working to an inaccurate and damaging definition of the grocery market place. This has allowed the big four companies to grow through major acquisitions of convenience store chains and must now be stopped.
2) The supermarkets exert both buyer and seller power in the market and this harms competitors and consumers
3) The planning system is an ineffective check on the further dominance of the major supermarkets. National planning policy promoting town centres is vitally important to the sector and should be made stronger and more efficient.
The main submission brings together the ACS case which has been developed during a two year market consolidation campaign. This will be supported by further evidence and papers drafted by experts from within and external to ACS over the coming weeks.
ACS Director of Public Affairs, James Lowman said: “We strongly believe that we have made a compelling case for action. The main submission is only the next step in an ongoing program of work that will ensure that the Commission are faced with a body of evidence that will be impossible to ignore. Most important of all is that we maintain the pressure on the Commission to ensure that they open up the books of the suppliers and supermarkets and ask the right questions. Only then will we be sure that they will see for themselves that these anticompetitive practices are taking place.
“We look forward to explaining our case to the Commissioners at our formal hearing, and are confident that the independent sector now has the very best chance of convincing the Commission of the need for action.”
Contact:
Rachel Lawson – Communications Coordinator
01252 515001
Michael Saxton/Julie Kirby – Grappa Public Relations
020 7486 4448 / 07970 507554
Note to Editors:
1. The Competition Commission Inquiry began in May 2006 and has to have been completed by May 2008, for more details on the inquiry visit www.competition-commission.gov.uk. ACS led the campaign to get the Inquiry, which began in November 2002.
2. The Submission covers the key aspects of the ACS case, which are:
• the competition authorities have been working to an inaccurate and damaging definition of the grocery market place, this has allowed big 4 companies to grow through major acquisitions of convenience store chains and must now be stopped.
• The supermarkets exert both buyer and seller power in the market and this harms competitors and consumers
i. Buyer power manifested in anti-competitive buying differentials from other retailers and wholesalers, this problem is compounded by the use of discounts and secondary payments which undermine the ability of remaining players in the market to be competitive.
ii. Seller power manifested in ‘micromarketing’ strategies that employ a combination of below cost selling, price flexing and other local marketing decisions that have a predatory effect in local markets.
• The planning system is an ineffective check on the further dominance of the major supermarkets, national planning policy promoting town centres is vitally important to the sector and should be made stronger and more efficient.
The three key issues are:
1) The competition authorities have been working to an inaccurate and damaging definition of the grocery market place. This has allowed the big four companies to grow through major acquisitions of convenience store chains and must now be stopped.
2) The supermarkets exert both buyer and seller power in the market and this harms competitors and consumers
3) The planning system is an ineffective check on the further dominance of the major supermarkets. National planning policy promoting town centres is vitally important to the sector and should be made stronger and more efficient.
The main submission brings together the ACS case which has been developed during a two year market consolidation campaign. This will be supported by further evidence and papers drafted by experts from within and external to ACS over the coming weeks.
ACS Director of Public Affairs, James Lowman said: “We strongly believe that we have made a compelling case for action. The main submission is only the next step in an ongoing program of work that will ensure that the Commission are faced with a body of evidence that will be impossible to ignore. Most important of all is that we maintain the pressure on the Commission to ensure that they open up the books of the suppliers and supermarkets and ask the right questions. Only then will we be sure that they will see for themselves that these anticompetitive practices are taking place.
“We look forward to explaining our case to the Commissioners at our formal hearing, and are confident that the independent sector now has the very best chance of convincing the Commission of the need for action.”
Contact:
Rachel Lawson – Communications Coordinator
01252 515001
Michael Saxton/Julie Kirby – Grappa Public Relations
020 7486 4448 / 07970 507554
Note to Editors:
1. The Competition Commission Inquiry began in May 2006 and has to have been completed by May 2008, for more details on the inquiry visit www.competition-commission.gov.uk. ACS led the campaign to get the Inquiry, which began in November 2002.
2. The Submission covers the key aspects of the ACS case, which are:
• the competition authorities have been working to an inaccurate and damaging definition of the grocery market place, this has allowed big 4 companies to grow through major acquisitions of convenience store chains and must now be stopped.
• The supermarkets exert both buyer and seller power in the market and this harms competitors and consumers
i. Buyer power manifested in anti-competitive buying differentials from other retailers and wholesalers, this problem is compounded by the use of discounts and secondary payments which undermine the ability of remaining players in the market to be competitive.
ii. Seller power manifested in ‘micromarketing’ strategies that employ a combination of below cost selling, price flexing and other local marketing decisions that have a predatory effect in local markets.
• The planning system is an ineffective check on the further dominance of the major supermarkets, national planning policy promoting town centres is vitally important to the sector and should be made stronger and more efficient.