The Office of Fair Trading (OFT) told just-food this morning (15 May) that while its referral of the grocery sector to the Competition Commission was the consequence of concerns about land banking practices, the commission is free to investigate any aspect of grocery retail that it sees fit.
“We referred the sector to the Competition Commission due to the land banking issue,” Corinne Gladstone said. “Before that we had raised concerns about pricing and price-fixing but we felt that there was insufficient evidence to support those accusations.”
The All Party Small Shops Group bought to light new evidence of land banking practices, whereby supermarkets buy large tracts of land around a store to prevent competition entering the area, and this issue formed the platform for the OFT’s recommendation, Gladstone said.
In its decision, the OFT did not highlight any supply chain issues and the relationship between retailers and suppliers is not one that concerns the consumer watchdog. “The OFT is a consumer body,” Gladstone explained, “we have to keep within our remit.”
However, while the office did not indicate that the commission should examine the supply chain this is not to say that the remit of the investigation will not be broadened.
“The Competition Commission can look at what ever it wants. It has greater powers than the OFT and, if there are indications of anti-competition activity in the supply chain, it may decide to investigate further. If it wants to look at supply chain issues it is free to do so,” Gladstone concluded.