Downloading PDF. Please wait... Issue 2089

Every little bit helps supermarket bosses

This article is over 13 years, 11 months old
A report by the Competition Commission last week helped highlight the power of the major supermarkets, but offered little to challenge their domination.
Issue 2089

A report by the Competition Commission last week helped highlight the power of the major supermarkets, but offered little to challenge their domination.

The commission released provisional findings and recommendations of its two-year inquiry into the grocery industry.

The inquiry was called by the Office of Fair Trading which raised concerns over the methods used by supermarkets to dominate local shopping.

The four major supermarket chains in Britain – Tesco, Sainsbury’s, Asda and Morrisons – together control around 75 percent of the £1.23 billion grocery sector.

Challenge

The competition commision’s report shows some of the lengths the supermarkets will go to protect their market position.

In particular it points to some of the ways supermarkets create “controlled landsites” – zones where they are able to effectively exclude competitors.

Supermarkets do this through buying up nearby land or by building several stores in small areas to create market saturation.

In Cambridge, for example, campaigners are fighting plans for an eighth Tesco to be built in the area. The company already has a 50 percent market share in the city.

The commission report falls very short, however, of recommending any measures that could challenge the stranglehold of the big supermarkets.

Instead it merely recommends a new code of conduct and the appointment of an ombudsman.

These are feeble and toothless responses to the rise of the giants that dominate food production and supply in Britain. Tesco welcomed the recommendations.

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