The Government has today published its response to the Competition Commission's (CC) inquiry into UK groceries retailing.
The CC concluded that in many respects UK retailers are delivering a good deal for consumers, but action was needed to improve competition in local markets and to improve relationships between retailers and their suppliers.
The CC has the powers to implement the majority of the measures it identified, but put the following recommendations to Government:
- Introduce a 'competition test' in planning decisions on larger grocery stores - The Government will reflect further on this recommendation following the CLG consultation on revisions to town centre planning policy and the conclusion of the legal challenge launched by TESCO on 30 June. It does not want to prejudge the outcome of this appeal
- Take action to prevent land agreements which can restrict entry by competitors;
- The Government will consult on this later this year
- Establish an independent Ombudsman to oversee a strengthened Groceries Supply Code of Practice (if the CC cannot get voluntary agreement)
- The Government notes that the CC will engage with large grocery retailers to implement this recommendation. If it cannot get agreement the Government will consider establishing the ombudsman itself. The Government would make any assessment based primarily on what would be in consumers' best interests
Consumer Affairs Minister, Gareth Thomas said:
"I thank the Competition Commission for such an extensive and thorough investigation. Many of the measures they have identified will benefit consumers and I hope that they can implement them quickly.
"Further work, dialogue and consultation will take place on the recommendations put to Government."
