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Competition Commission latest on retailers

Published:  23 July, 2008

Consumer choice could be limited by supermarket dominance, the Competition Commission (CC) said this morning.

The provisional findings of its 18-month enquiry, published today, said there was also a need to address relationships between retailers and their suppliers.

The CC claimed: "A lack of competition in certain local markets not only disadvantages consumers in those areas but also allows retailers to weaken their offer to consumers nationally."

The CC added that it was also worried by "the ability of grocery retailers to transfer excessive risk and costs to suppliers through various purchasing practices, such as retrospective changes to supply agreements".

It claimed these practices could "damage investment and innovation in the supply chain to the ultimate detriment of consumers".

The CC will now consider measures to address these concerns.

It will also look at changes to the Supermarkets Code of Practice, which regulates retailer-supplier relationships.

Peter Freeman, Chairman of the CC and Inquiry Group Chairman said: "Our focus throughout this inquiry has been whether consumers are receiving the benefits of vigorous competition, such as value, choice, innovation and convenience - and on most counts the groceries market delivers just that. However, we feel that consumers could be even better served.'

"Having looked in detail at local grocery markets, in most areas shoppers have a good choice and benefit from the strong competition between retailers, but in a number of local areas more competition would benefit consumers both locally and more generally."