dcsh 2008-2-15 08:13 PM
UK supermarkets set for shake-up
UK supermarkets set for shake-up
[size=2] [table=203] [tr][td] [img=203,152]http://newsimg.bbc.co.uk/media/images/44428000/jpg/_44428727_supermarkets203.jpg[/img] The big four supermarkets dominate the grocery market
[/td][/tr] [/table] [b]Supermarkets may be forced to sell land to allow rivals to open in areas where there is not enough competition. [/b][/size][size=2]The measure is likely to be among the CompetitionCommission's suggestions to remedy problems it has identified in theUK's grocery market.[/size]
[size=2]There could also be a call for an ombudsman to protect food suppliers in any disputes with the big four supermarket chains.[/size]
[size=2]The regulator will release its latest report at 1630 GMT.[/size]
[size=2] [/size]
[size=2][url=http://news.bbc.co.uk/2/hi/business/7245944.stm#mortgage][b]See the supermarkets' share of the market[/b][/url][/size]
[size=2]In its initial report in October, the commission said itwas concerned about retailers being able to transfer unexpected coststo their suppliers.[/size]
[size=2] [table=208] [tr] [td=1,1,5][img=5,1]http://newsimg.bbc.co.uk/shared/img/o.gif[/img][/td] [td] [img=66,66]http://newsimg.bbc.co.uk/media/images/42499000/jpg/_42499121_robertpeston66_2.jpg[/img]
[img=24,13]http://newsimg.bbc.co.uk/nol/shared/img/v3/start_quote_rb.gif[/img] [b]The net effect may be viewed as reinforcing a status quo in which Tesco has double the market share of its nearest rivals[/b] [img=23,13]http://newsimg.bbc.co.uk/nol/shared/img/v3/end_quote_rb.gif[/img]
Robert Peston, Business editor, BBC News
[img=203,1]http://newsimg.bbc.co.uk/nol/shared/img/v3/inline_dashed_line.gif[/img]
[url=http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/02/tesco_triumphs.html][b]Read Robert Peston's blog[/b][/url]
[url=http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=4302&edition=2][b]Send us your comments[/b][/url]
[/td] [/tr] [/table] [/size]
[size=2]One solution may be to create a supermarkets ombudsmanto protect suppliers in their dealings with the big chains, but therehas been some doubt about how effective a measure that would be.[/size]
[size=2]"The Competition Commission needs to be seen to be doingsomething and this could be a sop to suppliers," said Julian Wild fromRollitts Solicitors, who represents food companies in their dealingswith supermarkets.[/size]
[size=2]"It's hard to see that it's going to have a major impact," he added.[/size]
[size=2][b]'Too few supermarkets'[/b][/size]
[size=2]According to market research group TNS Worldpanel, theUK's big four - Tesco, Asda, Sainsbury's and Morrisons - now accountfor more than three-quarters (76.2%) of the grocery market.[/size]
[size=2]In October, the commission concluded that there were aspects of the grocery market that prevented or restricted competition.[/size]
[size=2] [table=208] [tr] [td][img=5,1]http://newsimg.bbc.co.uk/shared/img/o.gif[/img][/td] [td] A LONG INVESTIGATION
March 2005 - OFT finds supermarkets are sticking to their code of practice
November 2005 - Competition Appeal Tribunal tells OFT to reconsider
March 2006 - OFT begins consultation
May 2006 - OFT refers grocery market to Competition Commission
October 2007 - OFT publishes preliminary report
February 2008 - Competition Commission publishes provisional recommendations
May 2008 - Deadline for final report
[/td] [/tr] [/table] [/size]
[size=2]It said many people had too few large supermarkets to choose from in their local area which acted as a barrier to competition[/size]
[size=2]The commission found, for example, that certainretailers hold on to land, which could prevent others from setting upshop nearby.[/size]
[size=2]The commission is expected to recommend changes to the planning system to combat this problem.[/size]
[size=2]These could involve a limit on the length of timesupermarkets can keep undeveloped land and stopping supermarkets fromimposing restrictive covenants on land to prevent competitors buildingon it.[/size]
[size=2]Retailers could even be forced to sell stores or land in areas where they are too powerful.[/size]
[size=2] [/size]
[size=2] [/size]
[size=2] [img=416,222]http://newsimg.bbc.co.uk/media/images/44427000/gif/_44427224_grocery_market_pies416.gif[/img] [/size]
