Competition Panel Eyes Brit Supermarkets

Britain's Competition Commission will offer several proposals to reduce the dominance of the country's Big Four chains

The Competition Commission is expected to call for the launch of a new Ombudsman to protect food suppliers against the might of Britain's largest supermarkets this week, as it publishes the provisional findings of an 18-month investigation into the dominance of the Big Four -- Tesco, Asda, Sainsbury and Morrison's -- on the high street.

Other proposals expected to be included in the report include a crackdown on supermarket's land holdings, suggesting that large retailers are stopped from buying up land to prevent other rivals building nearby.

The report is also likely to contain proposals to tighten planning procedures for supermarkets, suggesting that local authorities give preference to applications from companies that do not already have a big presence in a region. This will be a blow to the likes of Tesco, the UK's largest supermarket group, which continues to argues that competition should be judged on a national rather than a local basis.

Tesco, which accounts for one in every eight pounds spent on Britain's high streets, has already built up a very dominant position in some towns around the country, causing controversy as local businesses have been squeezed out of the market. In Milton Keynes, for example, the group accounts for almost 50 per cent of the grocery market, while in Inverness, its share is bigger still.

However, the report is not expected to be as harsh on the supermarkets as some campaigners may have hoped. Food prices have fallen by more than 7 per cent over the last seven years, and the regulator is expected to point out that competition is relatively healthy in the market.

It is also set to float the idea of scrapping the "needs test", whereby supermarkets have to prove that a town or local region needs a new store before they are granted permission to build. Although this would make it easier for the big four to open more stores, it would make conditions tougher for smaller local businesses.

The final report is expected at the end of March next year.

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