The Office of Fair Trading (OFT) is expected to officially announce this week that the grocery market is to be referred to the Competition Commission (CC) for investigation.
More than 1,000 submissions have reportedly been received by the OFT since its draft ruling last month saying it was 'minded' to refer the market. However, as C-Store went to press, leading industry figures were anxious that any inquiry would have to be broad enough consider supermarket buyer power and pricing tactics as well as looking at land ownership and planning issues.
Outgoing Federation of Wholesale Distributors (FWD) chairman Rodney Hunt warned delegates at the Federation's annual conference that liberalisation of the planning system may simply provide a short-cut for a new entrant into the supermarket sector.
"Liberalising planning might mean a new player could be feather-bedded by being able to build on greenfield sites, and this is not the answer we are looking for," he said. "There is abuse of buyer power going on and any investigation should focus on this, not just land banks."
A leading competition consultant claimed that the CC could yet be persuaded to introduce a ban on below-cost selling or price-flexing by major supermarkets as part of an investigation into the grocery market.
Myles O'Reilly, a former chair of the Irish Fair Trade Commission, told the FWD conference that influencing the CC to take this step would be a hard fight, but one that is possible to win.
O'Reilly was a key figure in recommending a ban on below-cost selling in Ireland as part of the country's Groceries Order. Although it has recently been revoked, the Order outlawed below-cost selling in the Republic for 18 years, during which time inflation was actually lower for protected foods than for products not covered by the Order.
He said: "The Irish ban neither increased food prices nor prevented competition. It may be possible to influence the CC to ban below cost-selling or price-flexing. The forces ranged against fair trade regulations are strong, but the CC could be persuaded."

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