Archived press release

OFT to reconsider supermarket dominance of the high street

28 October 2005

Press release issued by the Association of Convenience Stores

The Office of Fair Trading (OFT) is to reconsider its decision not to refer the grocery market to the Competition Commission (CC) for a full review. The OFT informed the Association of Convenience Stores (ACS) that it is to withdraw its previous decision, following a legal challenge, supported by Friends of the Earth.

The OFT will formally withdraw its disputed decision at a hearing before the Competition Appeal Tribunal on 1^st November.

ACS Chief Executive David Rae said: "We are delighted that the OFT have decided to reconsider its previous decision. There are real problems in the UK grocery market that are undermining fairness and working against consumers interests. It is vital that the OFT gives full and detailed consideration to the concerns raised, they now have the opportunity to do that."

"Many issues need further investigation. Last year nearly 2000 independent stores closed their doors. Below cost selling and price flexing still takes place with no remedy 6 years after they were defined as a problem by the CC. All the while, the major multiple retailers continue to be allowed to buy hundreds of stores in spite of enjoying huge market power.

"There is a growing consensus within Parliament, political parties and amongst consumers that something has to be done to promote a fair and sustainable grocery market for the future. We will provide all the assistance and information we can to the OFT to help them to tackle these vital issues."

Friends of the Earth were party to the original application for a market review and intervened in the consequent appeal. Senior Food and Farming Campaigner Vicki Hird said:

"We welcome this turnaround by the OFT and hope that they will now start to listen to concerns about the devastating impact of the supermarkets on suppliers, high street vitality and the environment. Now we need a rapid and thorough review of the grocery market, and a referral of the matter to the Competition Commission, who have the power to break up the supermarket monopolies.

"The OFT should also take another look at the Supermarket Code of Practice, which is failing to protect suppliers from their bully-boy tactics."

Note

ACS made a formal request for a market investigation in November 2002, along with Friends of the Earth, the National Federation of Women's Institutes and FARM. The OFT responded with an interim request for further information as part of its conclusions on the Supermarket Code of Practice in March 2003. ACS provided further detailed evidence to that consultation on 31^st May 2005. The OFT issued its decision document in respect of the request on 2^nd August 2005.

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Published by Friends of the Earth Trust