UKs Main Supermarkets Avoid Crackdown

Tue, 23 Jan 2007
 
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Britain’s main supermarket retailers have escaped criticism in a report released yesterday by the Competition Commission . The long-awaited ‘Emerging Thinking’ report is based on the UK’s largest supermarkets and their dominance of the country’s retail market.

The Commission has been investigating the main four companies for eight months, and it is yet to find hard evidence on most of the controversial issues laid out in the progress report, which include Tesco’s ownership of land banks and whether larger retailers are damaging supplier provisions for smaller stores.

On the issue of land banks, the Commission says, "Tesco holds most lands, but other retailers are actively increasing their holdings also."

However, the Commission says that it is yet to examine the ‘waterbed effect’, for example if smaller retailers are made to pay more to suppliers than the larger supermarkets.

On the subject of supermarket dominance by the big four (Tesco, Sainsbury’s Morrison’s and Asda), the Commission reports that no evidence had been found with regards to less competition, and in fact there are difference practices between supply chains which is ‘not always bad for the consumer’.

"The supermarkets have come out of this okay. We always thought the inquiry was a bit of a nonsense in the first place," said Richard Ratner, retail analyst at Seymour Pearce.

The only criticism that seems to be reported by the Commission is the subject on milk suppliers where it says, "supermarkets are retaining an increasing share of the retail price for milk…We will be looking at this further as well as other primary produce sectors."

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