ePolitix.com Stakeholders comment on the Competition Commission's findings that there is no evidence of unfair competition between large supermarket chains and smaller shops.

The watchdog’s report found that some areas of the UK required more supermarkets and it also cleared Tesco of any wrongdoing in terms of essentially monopolising the sector.

Competition Commission chairman Peter Freeman, who headed the inquiry group, said that the aim of the investigation was to determine whether or not the consumer was receiving "value, choice, innovation and convenience".

He added that "on most counts, the groceries market delivers just that".

Party response: Conservative

Shadow minister for regulatory reform Mark Prisk said: "We broadly welcome the Commission's findings and look forward to their recommendations in the new year.

"However, we remain concerned that some small suppliers have had to accept unfair retrospective changes to their contracts with the supermarket chains. We shall therefore be looking to the Commission to significantly improve their contractual protection.

"We note the Commission has found that only a few local areas are dominated by a single supermarket chain, and welcome their stated intention to tackle this on a case by case basis.

"However, we have also sought reassurance from them that the 'needs test' should remain.

"This planning test is important in protecting market towns and local high streets and so enabling small, independent shops to compete with out of town developments."

Party response: Liberal Democrats

Liberal Democrat small business spokesperson, Lorely Burt said: "It is ridiculous for the Competition Commission to claim that there are too few supermarkets in this country.

"The last thing that small shops need is even more large supermarkets being built nearby taking all their trade.

"The Commission has failed supermarket suppliers and small shops by failing to tackle their exploitation of suppliers and planning law for their own gain.

"They have given the big supermarkets a slap on the wrist and their small competitors a slap in the face."

Stakeholder response: CPRE

To send a comment to the CPRE click here

Head of rural policy at the CPRE Tom Oliver said: "This represents a depressing failure to care about the interests of local communities which threatens to consign England's towns to more monotony." 

"This report is obsessed with the question of choice between monotonously similar brands of supermarket while failing to see that such a narrow view closes many more options off than it opens.

"The Competition Commission says some welcome things. It recognises the essential role of the planning system in promoting the orderly growth and development of existing town centres and the provision of services in a pleasant and widely accessible environment. 

"But it fails to lend clear support to the crucial 'needs test' which gives local communities the democratic option of deciding how many supermarkets they want in their towns.

"CPRE also welcomes the further consultation which the Commission is planning and will play an active part in that process.

"What is clear is that smaller shops and businesses and hard pressed suppliers count for little in the Commission's analysis."

Stakeholder response: Federation of Small Businesses

To send a comment to the FSB click here

Clive Davenport, FSB trade and industry chairman, said: "The Competition Commission's report seems to recognise problems such as below-cost selling and the shoddy treatment of suppliers, but claims that small independent retailers are not affected. This is absurd.

"Small independent retailers are closing at a rate of 2000 per year and you've only got to walk down your local high street to see the evidence of this.

"The suggestion that, to increase competition, the planning system should be relaxed to allow more supermarkets to be built is perverse.

"Consumers deserve more than a choice between four supermarkets selling the same products. The specialist retailers and independent stores that offer consumers real alternatives are suffering from the anti-competitive practices of the supermarkets.

"The Competition Commission's latest report does nothing to address this."

Stakeholder Response: British Retail Consortium

To send a comment to the BRC click here

British Retail Consortium director General Kevin Hawkins said: "This is a sensible and balanced report and rightly concludes healthy competition is good for consumers.

"It clearly demonstrates there is no systematic unfairness in the way supermarkets treat small retailers or suppliers and, above all, demonstrates our highly competitive grocery market has produced value, choice and convenience for customers.

"This is the third major investigation into the sector in seven years. They are costly and time consuming. I hope this will be the last such enquiry for a long time."

On supermarket/supplier relationships, Hawkins said: "The report is a vindication of supermarkets' dealings with suppliers. It finds no evidence of systematic failure in those relationships.

"The Commission has sensibly rejected prescriptive regulation in favour of possible reform of the existing, compulsory, code of practice.

"Supermarkets will welcome a debate about why it has been under-used, whether it should be extended beyond just the big four supermarkets and whether there should be some sort of ombudsman."

On the planning regime he said: "Planning policy supports the 'town centres first' principle but, all too often, this is misunderstood as 'town centres only'.

"Local planning authorities are too eager to block suburban development and deny retailers sites. As a result, some communities – often in deprived areas – have limited access to a good quality supermarket.

"Also few local planning authorities are supporting small retailers and most have failed to plan for future retail growth. The Commission is right to recognise that the planning system's costs and delays hinder start-up and expansion for small retailers."

On 'landbanks', Hawkins said: "A less restrictive planning regime that enables more store competition would be good for consumers. So-called land banks are largely a function of the current planning regime where good retail sites are increasingly scarce.

"When a site comes up that a retailer wants to develop now or in the future they will grab it. That may exclude a competitor but that is simply a side effect of the shortage of suitable sites."