Tesco To Deny Allegations By Watchdog

Mon, 02 Apr 2007
 
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Tesco, the UK’s leading supermarket is set to defend its position today against allegations that it has too much of a stranglehold over the UK’s grocery market, and consumer choice .

The Competition Commission is looking into a possible abuse of power by the big four supermarkets, to the detriment of the consumer by reducing their choice.

The retailer will make a submission that the Competition Commission in which it will criticise the way the term ‘local’ has been defined and how it classifies the grocery sector.

Tesco will claim the market is in fact national and not local, arguing that the Commission’s assumption of what constitutes the local market is up to three times smaller than it should be.

The supermarket giant argues that shoppers will spend up to half an hour driving to the supermarket they prefer, which is double the time expected by the Commission, who suggest a driving time of 10-15 minutes.

Tesco also say that small price increases can cause shoppers to switch stores, which suggests the market is already ‘fiercely competitive’.

Lucy Neville-Rolfe, Tesco's director of corporate and legal affairs said, "We have submitted a serious economic proposition. We hope that the evidence we have submitted will force the commission to review its definition."

The submission comes in response to the Commission’s initial "emerging thinking" document in January, which was the first part of its inquiry into the UK grocery market.

The other supermarkets being investigated by the Commission are Asda, Sainsbury's and Morrisons.

Any firms that are found to have an anti-competitive hold on the market may be forced to sell their stores off.

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