New proposals by the Competition Commission to increase the competitiveness of supermarkets have been criticised by both small business lobby groups and retailers.
The proposals, which were published on Friday, include plans to introduce a ‘competition test’ on planning applications for supermarkets, a ban on exclusivity arrangements, a new Groceries Supply Code of Practice (GSCOP), and the introduction of a new ombudsman to preside over disputes under the GSCOP.
The Federation of Small Businesses (FSB) said the Commission had let down small retailers.
It called for an independent regulator with a wide-ranging retail brief ‘to ensure fair competition in all parts of the sector’, and reverse the trend of 2,000 independent shops going out of business each year.
Clive Davenport, the Federation’s trade and industry chairman, said there is a growing consensus that ‘something must be done’ to protect independent retailers from the ‘damaging’ effects of the unchecked expansion of supermarkets.
“The Competition Commission has consistently failed to be an effective regulator to the retail industry,” he said
“The idea for an ombudsman to oversee the relationship between supermarkets and suppliers is a reasonable one, but it does not go far enough.
“There are issues such as below-cost selling and free parking for out-of-town shopping centres that the Commission has failed to address properly,” he added.
Stephen Robertson, director general of the British Retain Consortium, also criticised the proposals, saying they were against the interests of the consumer.
“Since the Commission has already acknowledged the grocery market is ‘delivering a good deal for customers’, it’s hard to see how its recommendations could mean customers being served better,” he said.
© Crimson Business Ltd. 2008
