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Friends of the Earth demands supermarket watchdog 'with teeth'

Apr 29 2008

Friends of the Earth is demanding that the Competition Commission take tough action on supermarkets in the final report of its two year-long grocery market probe, to be released this Wednesday (29 April 2008).

Friends of the Earth's supermarket campaigner Sandra Bell said:

"We need a watchdog with teeth - the `big four' supermarkets have consistently been found guilty of treating their suppliers unfairly so it's time for the Competition Commission to act on their own evidence.

"Reports indicate that the Competition Commission is about to step in with some long-overdue support for our farmers, but it's shameful that their plans will do nothing to help the small shops on our dying high streets.

"The Commission's failure to understand the importance of independent shops makes it even more important that the Government now brings in strong planning policies for diverse and sustainable town centres."

Notes

Friends of the Earth's key demands for Competition Commission's final supermarkets report

To protect suppliers the Competition Commission must:

• Commit to firm action that won't be watered down. Supermarkets have now been found guilty twice of treating their suppliers unfairly - first in 2000 and again in this inquiry. Following the last inquiry in 2000 supermarkets were allowed to weaken the remedy - the Supermarket Code of Practice - so much that it became ineffectual. This must not happen again.

• Appoint a supermarket watchdog with real teeth. The Competition Commission is expected to toughen the Supermarket Code of Practice and recommend a new Grocery Market Ombudsman to police it but it is likely that the supermarkets will be expected to voluntarily commit to the new remedies. Friends of the Earth points out that voluntary submission by the supermarkets to an effective remedy is extremely unlikely - if the CC itself doesn't have the power to act, then the Government must step in as a matter of urgency.

• Make sure that the watchdog has proactive powers of investigation and must be able to take complaints from primary producers like farmers, and not just first tier suppliers. With so many farmers struggling to stay in business it is vital that they are properly protected.

Friends of the Earth has been calling for a new Code of Practice and a Watchdog to police it for five years as part of the Breaking the Armlock Alliance ', www.breakingthearmlock.com/ It recently joined forces with other supplier organisations under the umbrella of the Cross Cutting Group co-ordinated by Andrew George MP
www.competition-commission.org.uk/inquiries/ref2006/grocery/ ¬
third_party_submissions_mps.htm .

To protect consumer choice the Competition Commission must:

• Toughen their plans for a Competition Test. Friends of the Earth welcomes a Competition Test that would stop one supermarket becoming too dominant in a local area, but the CC's current plans will not actually achieve this. The market share allowed must be much less than 60% and the test should cover smaller stores like Tesco Express and Sainsbury's Local. Even then the Test will not help independent shops.

Friends of the Earth is disappointed that the CC has failed to recognise the value of independent shops and real consumer choice. Instead it has focussed on choice between the big supermarkets. As a result it is not expected to put forward any solutions that will bring diversity back to UK high streets. It is now even more vital that the Government draws up forward-thinking policies for sustainable and diverse town centres in its planning guidance (Planning Policy Statement 6) due out soon after the CC's final report.

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