Representatives of the FWD, Association of Convenience Stores and other trade bodies held urgent meetings with the Competition Commission last week after it published “working papers” dismissing some of the arguments they have put forward to the Inquiry into the Grocery sector.
On the waterbed effect – where suppliers charge wholesalers more to subsidise their lower prices to the major multiples – the CC said: “It appears that any waterbed effect that may exist is likely to be of limited impact, affecting a minority of suppliers of groceries and largely not affecting the price aspects of the retail offer … we consider the likelihood that a waterbed effect is resulting in material detriment to UK consumers of groceries appears, at this stage, very small.”
It also rejected evidence that the number of independent c-stores was declining, claiming it had evidence of the opposite effect, but it did accept that the prices wholesalers were paying to suppliers were up to 13% greater than the major multiples.
FWD director general John Murphy said all the working papers were still the subject of on-going debate and submissions. He said the CC figures on independent c-stores were wrong because they only counted stores in town centres.