FRUSTRATION. That can be the only emotion engulfing wholesalers on reading the Office of Fair Trading (OFT) briefings to the national and trade press.
John Fingleton, chief executive at the OFT, has wasted no time in designing his own terms of reference for the forthcoming Competition Commission (CC) inquiry.
There is no “nudge, nudge, wink, wink” these days at OFT. Instead of coded messages to journalists over dinner in the West End, for the first time we now get the OFT strategy revealed in the national press warts and all – and there are plenty of warts.
Even before the end of the consultation process prior to reference, we are now aware that the OFT wants to ditch wholesalers’ concerns about price discrimination. Mr Fingleton has said so quite plainly.
FLAWED. Mr Fingleton rejects the history of how the current flawed structure of the market is due to the (proven) path that the giant superstores have trod to reach their all-powerful dominance.
They have done it by extracting prices from suppliers which discriminate against wholesalers and, therefore, independents. Mr Fingleton says that planning and land banks are the central issue – as they exist they prohibit new entrants into the market. This is a red herring.
The OFT has hijacked the anti-Big 4 campaign and converted it into a planning debate. Planning is important only if you have the cash to buy superstore sites and you only get that cash if you are a big powerful retailer who can extract terms from suppliers which produce that cash!
This is known as the circle of logic.
SQUEEZE. Press reports reveal that the OFT view is that it is good for consumers if manufacturers are “squeezed” for lower prices. So Vigilante invents a new term: squeeze-power.
If squeeze-power is the only factor that interests OFT because it produces lower prices for consumers, then why was Tesco not allowed to buy Safeway lock, stock and barrel to put the squeeze on suppliers big time?
OFT “planning” press briefings began as soon as it announced that it was minded to refer to the CC.
The campaign by the Federation of Wholesale Distributors which, 20 years ago, began the process which has now resulted in a CC reference, has centred on price injustice and the commercial struggle this imposes on thousands of sole traders and family businesses.
This is where the battle must be fought.
CAT. Few would have thought that when, two years ago, FWD opened the door to call OFT to account, that we would have ended up with a reference which avoids the very issue with which the door was opened.
FWD was the only trade body which recognised the opportunity to test the Tesco acquisition of Adminstore, the London c-store group, at the Competition Appeals Tribunal (CAT).
What happened next was that OFT and Tesco united to use psychologically their bottomless financial muscle to ensure FWD withdrew unhurt – but not before CAT and the world in general had become aware that OFT and Tesco were not “without a stain”.
After that the then OFT bosses were on notice. This they ignored and they have now been replaced. But does the old discredited culture live on?
SPECIAL. Surely OFT cannot ignore the growing consumer lobby calling for more diversity in the market?
Surely OFT cannot ignore the crucial socio-economic position in the community of the sole trader or family Features > Business, the creators of this diversity?
Mr Fingleton, asks Vigilante, do you not realise that the squeeze-power you so admire is hurting these small businesses and therefore hurting their communities, leaving manufacturers relatively unscathed?
OFT must be asked for a genuine assurance from the very top, and not a bureaucratic fob-off, that it will address as a priority the special position of the sole trader and family business.
These businesses are the core customer base of every wholesaler. They are special. They are not the same as big multiple corporate c-store operators such as Tesco, Sainsbury, the Co-op and the oil companies.
It’s about time OFT said with clarity that it recognised this differential – and acted accordingly.
REPLAY. Many wholesalers are now saying that when the new investigation is complete, OFT can expect to be called back to the CAT yet again to explain why it did not go to the root of the issue – the place of the sole trader.
But that will be two years down the line and involve the loss of another two thousand or so independent shops perhaps.
We do not want to live in a chainstore Britain. But we are heading that way, thanks to you know who.
STARTLED. You can bet we were when, well before the children’s bedtime, the Bremner, Bird and Fortune show on Channel 4 (March 18) opened a sketch featuring a placard proclaiming “F*** Tesco”. The Bird and Fortune duo told the story of how the local community was taking direct action against the giant superstore, defending the local independent retailer whose shop was most popular.
But what did Cheshunt think when, just after the appearance of the sketch with the message you could not miss, there suddenly appeared on screen a commercial proclaiming the advantages of shopping at Morrisons?
COUPONS. Every cash and carry and delivered wholesaler will now be geared up for the Daily Mirror/ Daily Record (Scotland) promotional feature for local shops to be published on May 26 just ahead of NID on June lst.
This edition will mean business for wholesalers. It contains no less than 10 money-off coupons on big brands to be redeemed at independent retailers, plus supporting editorial stories.
This generic activity, orchestrated by the FWD PR Action Group (PRAG), is a bigger and better repeat of the exercise in 2005.
My Shop Is Your Shop (MSYS) and NID are gaining increased lift-off and becoming absorbed into the fabric and consciousness of the industry.
DRINKSUMMIT. When FWD launched its Summit series in 1989, few believed they could be so effective – but everyone has followed suit these days with summits, it seems.
Catersummit produced unprecedented higher levels of partnership between wholesalers and suppliers and had an impact on caterers too.
Now we are approaching Drinksummit, the unrivalled FWD specific alcohol market forum which has touched every corner of the wholesale/independent sector with the Take Home Blueprint to which the event gave birth in 1984.
It is difficult to guess at the increased profitability enjoyed by our market since the Blueprints were launched but it is generally agreed it runs into many millions.
Drinksummit on June 8 9 at The Oxford Belfry, off the M40, is lining up a programme that truly reflects every issue facing our marketplace today and is unmissable.