The UK’s Competition Appeal Tribunal (CAT) today (4 March) found in favour of Tesco after the retailer submitted an appeal against a proposal to establish a competition test in the UK planning system.
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Following last year’s inquiry into competition in the UK’s grocery retail market, the Competition Commission proposed a number of initiatives to curb the powers of the country’s big supermarkets, including a so-called “competition test” to be written into the planning regime.
Tesco lodged an appeal against this move, contending that the competition test would not remedy the adverse effect on competition identified by the Commission.
In its appeal, Tesco argued that the competition test “would not address the planning barrier identified” but would “introduce another barrier into the planning process”, increasing delays and costs, and possibly jeopardising long-term regeneration schemes.
In its judgement, the CAT concluded that the Competition Commission did “not fully and properly assess and take account of the risk that the application of the test might have adverse effects for consumers”.
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By GlobalDataTesco welcomed the CAT’s findings. Lucy Neville-Rolfe, Tesco’s executive director of corporate and legal affairs, said the group was “delighted” with the news.
“A new test in the planning system would increase costs and make the process even slower and more bureaucratic. It would be particularly perverse to introduce a test that would block investment in the current economic climate.
“We would now like to draw a line under this and get back to focusing on customers in these challenging times.”
However, a spokesperson for the Competition Commission told just-food that the test is “not necessarily dead in the water”.
“The judgment has not questioned our findings in the groceries report nor our proposed measures. Specifically it has not challenged the rationale for a competition test to tackle local supermarkets monopolies or its design,” the spokesperson said.
“The appeal was upheld on the narrow grounds that certain considerations about how the test would work and its costs and benefits should have been explored further in the report.”
The spokesperson said that a further hearing was scheduled for 16 March.
“At this time, [the] CAT could very well come back to us and say ‘if you are going to introduce the test you would need to do X, Y and Z’.”
