UK think tank the New Economics Foundation (NEF) has accused the country’s Competition Commission of failing to carry out its statutory duties in its examination of the UK grocery sector.
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The Commission’s approach, the think tank claimed, is based on inadequate evidence and a failure to protect the interests of all consumer groups.
Emphasising the decline of independent local shops and street markets, the NEF said that choice and innovation are being undermined – both of which are measures of consumer detriment under UK law dating from 2002.
The think tank said yesterday (12 April) that the Commission would fail in its remit if it ignores crucial evidence of market distortion and fails to consider the needs of a wide range of consumers.
In taking an overly simplistic view of consumer interest – one based on price alone – and failing to gather sufficient evidence from suppliers and consumers, the Commission has failed to adequately define consumer interest and is failing to make full use of the powers it possesses, the NEF said.
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By GlobalData“The regulators are not counting the extra value that genuine local shops provide in terms of economic benefit and the social glue that holds communities together. This creates an in-built bias in favour of the large supermarkets who distort markets.
“Ultimately the collective dominance of the big four supermarkets undermines the choice of consumers to enjoy a full range of goods and services provided by a healthy range of formats, including a diversity of independent local retailers and street markets. Innovation is hampered too. Both choice and innovation are measures of consumer detriment that the Commission is obliged by law to prevent,” said Andrew Simms, NEF’s policy director.
According to NEF, unless the Commission takes effective action, the dominance of the ‘big four’ is set to grow – squeezing competition out of the market.
If the Commission does fail to act, NEF said, the implications for the organisation are far-reaching. “The Commission has yet to prove that it is capable of managing a vastly changed modern retail landscape, in which the leading players are becoming ever more powerful,” Simms said.
“Unless it makes full use of its powers for the next phase of its inquiry, the big, centralised logistical operations of the supermarkets will continue to drive the homogenisation of business, shopping, eating, farming, food, the landscape, the environment and our daily lives. The endgame could be Britain turning, in effect, into a one-supermarket state.
Simms added: “If the Commission can’t do its job and put in place the checks and balances that could ensure genuinely open markets, people will be justified in questioning exactly what the Commission is for.”
