Supermarkets inquiry: CC consults on possible remedies
On 22nd February the Competition Commission made available a statement of possible remedies relating to its monopoly inquiry into supermarkets. This follows issues letters which were sent to 24 supermarkets on 31st January. The CC expressed concerns as to the existence of localities in which one or two supermarkets had a high market share; price competition on a relatively small number of frequently purchased items; whether price changes are passed through to consumers rapidly enough; whether prices sufficiently reflect the costs of different products; and possible excessive buying power. The remedies listed have been grouped under three main headings:
(a) Competition issues (especially local market concentration and barriers to entry) -Restrictions on investment, divestment of land holdings, divestment of stores, prohibition of restrictive covenants restricting availability of sites to competitors.
(b) Pricing-Improved transparency of pricing, e.g. by publishing current retail prices on the Internet, pricing policy generally, profitability
(c) Relations with suppliers-Drawing up a code of practice governing relationships between suppliers and supermarkets to ensure that any supermarket found to have exploited excessive buyer power should no longer do so.
On 21st February, the Competition Commission informed the Secretary of State that it would be unable to complete its report on the monopoly reference by 7th April. The report is now due by 31st July.
(Competition Commission Press Release 10/00, DTI Press Release 200/119)
