Competition Commission - what is it good for?

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Unless the Competition Commission fails to act to curb the power of supermarket chain Tesco, 'people will be justified in questioning exactly what the Commission is for', says Andrew Simms, Director of the think-tank the New Economics Foundation (NEF).

In a submission to the Competition Commission inquiry over the market share and tactics of the 'big four' supermarkets, the New Economics Foundation accuse the Commission of taking an 'over-simplistic view of consumer interest', dealing with shoppers as if price were the only factor to be considered. NEF also points a finger at the Commission for failing to interview enough customers or suppliers, choosing to focus instead purely on the supermarkets themselves.

'The regulators are not counting the extra value that genuine local shops provide in terms of economic benefit and the social glue that holds communities together. This creates an in-built bias in favour of the large supermarkets who distort markets,' said Andrew Simms, NEF's Policy Director.

The report criticises Tesco's plea to the Commission to redefine its definition of a 'local' shop - from a 10 minute drive at present to a 30 minute drive. But it equally blames the Competition Commission for failing to take effective action, and effectively endorsing the continued dominance of the 'big four'.

'The endgame could be Britain turning, in effect, into a one supermarket state,' said Simms.

NEF are calling for an independent 'retail monitor' to be established, which would ensure fair dealings between suppliers and retailers.

This article first appeared in the Ecologist April 2007