FWD slams failure to address unfair prices in CC remedies

The Federation of Wholesale Distributors has condemned the Competition Commission’s Provisional Decision on Remedies for its failure to address pricing anomalies that were uncovered during the inquiry into the grocery market.

FWD director general John Murphy said: “The CC has found evidence that our members pay up to 16% more for goods than can be extracted by the major supermarkets with their huge buyer power.

“The sheer scale of this imbalance makes true competition on the high street impossible, and we had expected that the inquiry team would have got to grips with this in its remedies proposals.”

Commenting on other aspects of the proposals, Murphy, said: “The planning measures outlined, and ending the use of restrictive covenants on land use, only favours the big players in the grocery market and will reinforce the oligopoly that currently exists.

“The idea of introducing an ombudsman may have some merit, but only if his office is given the power to operate pro-actively, is able to guarantee anonymity to suppliers who may be intimidated by the ‘climate of fear’ situation and impose meaningful fines on offenders. We would also expect the ombudsman to ensure that suppliers’ price structures are fair to the wholesaler/independent retailer channel.

“The proposal to extend the scope of the Code of Practice to all retailers with a turnover of pound;1bn plus is quite unnecessary. The problem that the original code sought so ineffectively to redress stemmed fairly and squarely from the abuse of buyer power by the Big Four.”

The FWD has made final representations on these issues and the CC is due to complete its report by May 8.

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