There’s a long struggle ahead

Though it is heartening that the Office of Fair Trading has finally conceded there might be some kind of imbalance in the grocery market that needs to be investigated, no one in the independent sector should get carried away just yet into thinking we have won.

After a long, expensive campaign we can at last celebrate some progress, but there will now be an even longer inquiry, and some huge financial arsenals will be pitted against us.

At least at the moment the major multiples appear divided, and are sniping at each other. Tesco is being attacked by its rivals for the size of its land bank, which they say gives it an unfair advantage when it comes to developing supermarkets.

Amusing as it is to see these paragons of virtue arguing over unfair advantages, this is a distraction from the main focus of the argument, which is the disparity in the terms the major multiples are charged by suppliers in comparison to what wholesalers pay. Taking into account the cost of supplying our sector, we still get charged far more than the major multiples because of the pressure they exert on suppliers.

Let’s hope the Competition Commission does what the OFT brazenly refused to, and accepts wholesalers’ offers to open their books to scrutiny. This would finally prove what everyone except the OFT has known for years.

Such a move will no doubt unite the major mults, who will argue that their strong-arm tactics give consumers lower prices. We must hope that the Commission decides fair prices for everyone is the way forward, rather than artificially low prices just for those who shop in the big four.

Despite last week’s victory we must not relax. We will have to fight tooth and nail to get our message across, and if anyone doubts how difficult it will be remember what happened after the last inquiry in 1999-2000.

After a year and a half the report said there were shortcomings in the market, but nothing could be done about them, and the only tangible result was the pathetic code of conduct which achieved precisely nothing.

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