Speaking to The Guardian, former OFT chairman John Bridgeman, who led the last major inquiry into supermarkets in 2000, said the market had changed dramatically and a new study was necessary to look seriously at supermarket chains’ “abuse of known positions of local dominance”. Bridgeman’s comments are the latest in a series of public pronouncements by officials in favour of a market review, and the pressure is on the OFT to refer the market to the CC.
The judge in the Association of Convenience Stores’ (ACS) appeal against the OFT’s view of the market (C-Store, November 4) instructed the Office that it need only have “reasonable grounds for suspecting” that the market was operating in a way that prevents, restricts or distorts competition to refer the matter for further investigation. The ACS is to re-submit its evidence of market distortion, including examples of supermarkets’ below-cost selling and price-flexing, to the OFT early in the new year, in the hope that the OFT will make a ruling by Easter.
Any delay and the ACS has the option of using legal powers to compel the OFT to reach a decision quickly. The OFT was also scheduled to give its views on the state of high street retailing to the All Party Small Shops group this week. It will be the last piece of evidence for the MPs’ report, which is expected to be published early in the new year.
Speaking to the Small Shops Group hearings, Competition Minister Gerry Sutcliffe stressed that under competition law the OFT must act independently of ministers, but he added: “I do have concerns that there is an imbalance in grocery retailing at the moment and that the problem needs to be addressed.”