Proposals to stop the "Big Four" supermarket chains from bullying out rivals in the £95bn grocery market were unveiled yesterday by the Competition Commission.
The major forces in retail - Tesco, Asda, Sainsbury's and Morrisons - would be banned from entering into legal agreements preventing rivals from building on land they are selling. The proposal is contained in a package of measures aimed at putting a stop to "land-banking" - the practice of buying up land near a store to keep back competitors.
But some have described the report as toothless because no store or acre of land will have to be sold and no significant changes to the planning system have been proposed.
The Competition Commission, which has carried out a two-year probe into the Big Four's dominance of the grocery market, said it wanted an independent ombudsman to be appointed whose remit would be restricted to overseeing the supermarkets' relationships with suppliers.
In some cases, it is claimed, big chains were retrospectively changing their agreements with suppliers to shift excessive risks and costs on to them. These changes should be banned, the commission said.
A proposed new Groceries Supply Code of Practice, enforced by the ombudsman, would replace the existing code, extending it to all UK grocery retailers with a turnover greater than £1bn.
But it emerged the commission's provisional recommendations over anti-competitive activity in the UK groceries market fell short of forcing supermarkets to sell "stockpiled" land they own in all areas where there are not enough different chains of retailers.
It did, however, want to ban the use of restrictive covenants prohibiting grocery retail use, said to be used by supermarkets when they sell land to make it less likely that rival stores can be built there. It proposed a ban on "exclusivity arrangements" between land owners - such as local authorities - and retailers. It also wanted to create a "competition test" for planning decisions involving new, large grocery stores.
However, there was criticism that the report did not go far enough.
Sandra Bell, of Friends of the Earth, said: "For any changes to the planning rules to be effective they have to apply to all formats of stores. Otherwise supermarkets can open a series of small stores and dominate local markets."
The New Economics Foundation, the independent think tank, said some of the proposals came "straight out of Alice in Wonderland" believing that instead of breaking the stranglehold of the big four supermarkets, they would tighten their grip.
"The big supermarkets will probably go to bed happy in the knowledge that they have a largely compliant regulator."
Catriona Munro, head of EU & competition, with the Glasgow-based legal firm of Maclay Murray & Spens, said supermarkets would feel they have done well out of the decision - as they had not been landed to with the possibility of being forced to sell land.
Tesco said introducing a new ombudsman could be "bureaucratic and an unnecessary cog in a supply chain which has worked well for consumers".
Health warning
Supermarket healthy eating messages are often drowned out by promotions for unhealthy food, according to a report out today.
The government needs to harness the power of supermarkets to improve the UK's health, according to the Sustainable Development Commission (SDC).
Research suggests current efforts are not sufficient to meet health improvement targets, the Green, Healthy and Fair report warned. The SDC also said healthy messages such as "five a day" are drowned out by a larger proportion of adverts for high-calorie food.
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