Competition report backs supermarkets

The Competition Commission appears to have rejected most of the arguments put to it by the small store and wholesale sector in its inquiry into the grocery market.
In its provisional findings published today, the only concerns identified were a need for more large supermarkets in some areas to ensure competition, and bullying of suppliers by the supermarkets.
The Commission insisted that convenience stores with a strong retail offer would prosper, and rejected evidence suggesting supermarkets targeted local opposition with below-cost selling and coupon offers.
It also rejected suggestions that a decline in independent stores could cause severe damage to the wholesale sector, and denied the existence of the waterbed effect, where smaller retailers effectively subsidise larger retailers’ cost prices from suppliers.
Representatives of the small store and wholesale sectors are currently looking in detail at the 270-page report and several hundred pages of appendices and are expected to make a co-ordinated response later today.
Any formal responses disagreeing with the Commission’s provisional findings are required to be submitted by November 30, and its final report is due to be completed by May 8 next year.

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