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May 9, 2006

UK: OFT refers grocery market to Competition Commission

The Office of Fair Trading today (9 May) delivered its highly antisipated decision to refer the UK’s grocery retail market to the Competition Comission for investigation.

The UK’s Office of Fair Trading today (9 May) delivered its highly anticipated decision to refer the UK’s grocery retail market to the Competition Comission for investigation.

“This reference will allow the Competition Commission to examine in detail all aspects of the grocery sector, ensuring that consumers are able to benefit from strong competition through even lower prices, improved quality and choice, and continuing innovation in the market,” John Fingleton, chief executive of the OFT, said.

The decision follows a month-long period of public consultation after the OFT proposed a CC investigation into the sector at the beginning of March. The Office said that the public response was, in the most part, in favour of further investigation.

In a statement, the OFT emphasised the problems that small retail businesses face when establishing new sites. The planning regime represents a costly barrier to entry into the market, a problem that is augmented by the fact that big supermarkets have significant land holdings and, in some instances, attach restrictive covenants when selling sites, the OFT said. 

The CC investigation is not limited to considering only the issues that the OFT has identified.

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