GROCERY MARKET ALREADY DELIVERING FOR CUSTOMERS - BRC CHIEF

15 February 2008

Since the Competition Commission has already acknowledged the UK’s highly-competitive grocery market is, “Delivering a good deal for customers,” it’s hard to see how its recommendations could mean customers being served better.

That was the reaction of new British Retail Consortium chief, Stephen Robertson to the Commission’s ‘Remedies Working Papers’ (the latest stage of its UK groceries market investigation) published today (Friday).

He stressed intense competition continues to keep shop prices down, making a major contribution to minimising overall inflation, as well as bringing consumers choice and innovation.

The BRC said the Commission is right to conclude competition is working and what’s needed is more competition not less.

New British Retail Consortium Director General Stephen Robertson said: “What is this endless enquiry achieving? The Commission accepts healthy competition is delivering for consumers. That is not in dispute. These proposals are peripheral and will not lead to customers being served better.

“This is the third major investigation into the sector since 2000. They are costly and time consuming. It’s time retailers were allowed to get on with delivering for customers.”

On strengthening the supplier code and introducing an ombudsman, Stephen Robertson said: “The Commission searched hard but found no evidence of systematic failure in supermarkets’ relationships with suppliers. It’s not clear what need there is for another bureaucratic layer. The voluntary supplier code, which is currently compulsory for the “big four” supermarkets, was launched in 2002. It was, and still is, a sensible attempt to set down what is and is not permissible behaviour but suppliers have not made use of it. Despite critics’ claims, the Commission did not find that was because suppliers are afraid of retaliation.

“Abuse has not been found because supermarket/supplier relationships are overwhelmingly mutually beneficial and built on trust. Creating new channels for complaint would do nothing but pile on extra costs which have to be met from somewhere.”

On new local authority planning powers Stephen Robertson said: “The idea that new shops are forced on unwilling residents at the whim of retailers is nonsense. Developments are subject to community consultations and decisions are ultimately taken by a planning committee of local councillors.

“The Commission rightly recognises that customers are best served by a planning system that maximises choice. If customers don’t want a store they will not use it and it will fail. A speedier more predictable planning system is in customers’ interests, expecting politicians to assess markets is not.

“The OFT and local authorities have no experience in assessing competition in local markets. Giving either power to assess the competition effects of planning applications would add another tier of bureaucracy at a time when Government is trying to simplify the planning regime.”

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