The Federation of Wholesale Distributors (FWD) has thrown its weight behind the Association of Convenience Stores’ (ACS) legal challenge to the competition authorities.

The FWD is to provide financial backing and behind-the-scenes support to the organisation’s appeal to the Competition Appeal Tribunal (CAT) (C-Store, October 7).

The ACS maintains that the Office of Fair Trading (OFT) did not give proper consideration of its evidence before ruling out a full review of the grocery market or a referral to the Competition Commission in August. In its submission to the OFT, the Association cited examples of price-flexing, below-cost selling and raised barriers to entry related to the spread of grocery multiples into the convenience sector. Yet the OFT still ruled that the market operated competitively and in the interests of consumers, a conclusion that infuriated campaigners for the independent trade.

A case conference on November 1 will determine the timetable for the appeal and what defence the OFT will offer, after which the ACS will know what sort of legal bill it could be faced with for pursuing the appeal. The FWD’s pledge of support is significant because the Federation has gone through the CAT procedure before, when it challenged Tesco’s acquisition of Adminstore last year. Although the threat of rising costs forced the FWD to withdraw, it secured a key concession for future appeals whereby the complainant can now ask for protection against the legal costs of a third-party “intervener”.

This means that if a major supermarket such as Tesco wanted to get involved in the dispute, the ACS would not then be saddled with a massive legal bill were the Association to lose.

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