It’s a funny old world. The first page of the Competition Commission’s report into grocery retailing says that the UK grocery industry is competitive and delivers “good outcomes for consumers”. The 269-page document goes on to outline how this state of affairs should be fixed.
That’s actually a slightly unfair description. The inquiry has done a thorough job and its formidable chairman Peter Freeman demonstrated a determination to focus on the core issues. He resisted getting drawn into spurious claims about the power of the supermarkets that have no bearing on competition issues.
In the face of intense pressure, he has given the grocers what is largely a clean bill of health. This may have disappointed some, particularly the small shops lobby, which must be crestfallen, but no one can argue with the thorough examination the inquiry has given the industry.
But the Commission’s proposed remedies are taking the proverbial sledgehammer to crack a nut. Nothing in the report explains how the new competition test is going to turn the planning system into anything other than an administrative and legal nightmare. Even the OFT and the government department in charge of planning don’t know how they’re going to manage it.
And the proposed ombudsman is a strange way of putting right things the Commission hasn’t identified as wrong. The Commission’s brief is to act in the interests of consumers. So how can setting up a body that represents the interests of suppliers help secure a better deal for shoppers?
Crucially a glance through the proposed remedies shows that if the Commission’s plans are all implemented the OFT will take a key role in all aspects of the sector. Its humiliating apology to Morrisons last week and the latest in its series of headline grabbing probes into the grocers, which have muddied the retailers’ names before any evidence has been found, show it to be an organisation that is gunning for store groups.
The sum total of the proposed changes is extra cost and complexity to an industry that, by the Commission’s own admission, delivers a good deal for consumers already. Funny old world indeed.
Read Tim’s The Retail Week column today at retail-week.com
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