CONTRARY. The airwaves are alive with the sound of the great and the good just as we arrive on the cusp of the momentous judgement on the Big Four about to be delivered by the Competition Commission (CC).
The redoubtable chief executive of IGD, Joanne Denney-Finch, told the Today programme’s debate on the CC’s review (August 30) that the “discerning” consumer now held the balance of market power and not suppliers or giant retailers
As the latter are major financial supporters of IGD, she would say that wouldn’t she, to paraphrase Mandy Rice-Davies and her famous court utterance. But Joanne’s organisation is the most powerful academic influence on Government on grocery matters.
Her view that consumers hold the key to fair trading runs contrary to the forceful campaign mounted by FWD, ACS, NFRN and the RSA who unequivocally point the finger at the over-riding power of the giant multiples and their flagrant abuse of it.
How will the IGD rationale play in the CC – and Downing Street?
MEMORY. It’s just as short in the trade as anywhere else so on the brink of the eagerly-awaited judgement by CC chairman Peter Freeman it’s worth reminding readers of how we got to where we are.
FWD mounted a Spring offensive in 2004 when it pioneered the path to the Competition Appeals Tribunal (CAT), seeking a reversal of the OFT’s passive approval of Tesco’s acquisition of Europa and Cullens, the core of London’s c-store marketplace.
FWD was set to challenge the OFT, but CAT (bewilderingly) allowed a militant Tesco to intervene with its unmatched battalions of expensive barristers, thus producing the inevitable coerced withdrawal by FWD.
Then the OFT forgot its mission to defend those such as FWD seeking fair trading in a flawed market and promptly asked for its legal costs to be paid by FWD.
What happened next was to impact on today.
FEAR. The CAT ruled that it should not frustrate its objectives by making orders for costs which could have a “chilling effect” and deter small businesses or their representatives from appealing against OFT decisions.
This ruling resulted in a stunned OFT gaining a paltry 25% of its costs – but crucially it demonstrated that CAT was not your usual legal patsy which could be won over by the establishment and/or the powerful.
This precedent won by FWD -chaired by Rodney Hunt – then enabled ACS to go to CAT without the fear of sustaining damaging legal costs.
It was the ACS victory at CAT, overturning another passive OFT decision in favour of the giants, which resulted in the CC market review.
PREDICTIONS. In the absence of rooms which smokers can fill, hotel outdoor smoking areas have become the host venues for those hardy creatures who are also addicted to trade gossip and who can’t drop either habit.
It’s said that the best quality innuendo and rumour-mongering is to be found here.
The CC and its final decisions, are the big topic, bigger than football or the alcohol price wars among the giant multiples forecast for Christmas.
This is the consensus on the eventual outcome of the CC review arrived at by one late night open-air discussion group. Vigilante concurs:
(1) A fair trading regulator – Offshop – will be appointed with very sharp teeth.
(2) A planning system will be introduced to curb superstore development and Tesco will be ordered to divest some sites.
(3) A prudent Gordon Brown will insist that giant suppliers and retailers pay for the new regulatory regime with a “fair trading levy”.
(4) Tesco will lodge notice of appeal against any perceived curbs to the highest court in the land – a process which will take a year or two to come to fruition during which hundreds more small shops will die.
EYE-CANDY. The Palmer Harvey purchase of T A Symonds, and its declaration that it is on “the acquisition trail” will alert more than a few independent wholesalers to the fact that their businesses are sought after.
Many depots have closed over the past decade but some which have survived the onslaught of the giant multiples are keen and lean and eye-candy to the bigger wholesalers. It could be jackpot time for some.
In the early 2000s, the now replaced Booker hierarchy and P H held talks about a merger but this might be difficult today given their market shares and an eagle-eyed OFT.
Appropriately discussed in the aforementioned outdoor smoking area, given the company’s strength in tobacco, perceived wisdom is that P H, masters of the delivered culture, remain cool about cash and carry.
JAMIE. A relative who runs a substantial company delivering school meals becomes apoplectic at the mention of Jamie Oliver whose campaign for healthier foods for children has hurt the school burger and chips market.
With more mums making sandwiches for their offspring to take to school – the lunchbox market should be booming – the manufacturers and wholesalers of “unhealthy” meals are suffering.
Rentokil Initial saw a big slump in its school meals delivery business due to lower uptake of traditional meals in favour of the new Jamie-inspired menus.
Turkey Twizzlers were a target for Jamie. Children within Vigilante’s knowledge love ’em. So did wholesalers. It’s serious.
BOUNCER. Where will you find the best-dressed security chaps in the convenience store market? Tesco Express gets our bet.
Their uniform is a smart dark suit and crisp white shirt and dark tie – light years away from the neo-military gear worn by the bouncers lurking near entrances to shopping malls and superstores.
But what does the need for a security man on duty at the entrance to a c-store say about the shop, its customers and its staff? Anything?
DEFENDER. Gamekeepers and poachers come to mind when erstwhile editor of The Grocer Julian Hunt, inevitably dulcet-toned, reasonable and friendly, makes yet another broadcast on behalf of the Food and Drink Federation.
Julian’s defence of cartoon characters used by big brands to entice children to eat breakfast cereals soon saw off a limping Radio 5 inquisitor. Julian (a Blackburn Rovers fan) was defending fun and why not?
Next followed a similar dead-bat, loose top hand defensive stroke by Julian to block a hack’s attack on poor or confusing nutritional information on packaging – information which some consumers find impenetrable, but hey!
Avuncular Julian is living proof that journalists who become propagandists are best at fending off other journalists who are intent on mischief.