The early phase of the UK’s Competition Commission investigation into the grocery sector has begun to examine the issue of supermarket’s land-banking practices.
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When the OFT referred the sector to the commission it highlighted this issue as a major barrier to competition. However, a CC spokesman told just-food today (30 May), the probe is not limited in scope by the OFT’s referral.
“Land banks are one of the things we’re asking about, but it is only one of a number of issues we will be considering” Rory Taylor of the OFT said. “We are required to look at any features of the grocery market that prevent or restrict competition. The supply chain, for instance, could well form part of the inquiry.”
In the early stages of the probe, the CC has requested information from major supermarkets about current land interests, including those owned by a third party such as a property developer.
“As soon as an investigation is referred to us we send out things called first day letters. I believe that some of the questions we asked certainly the bigger supermarkets addressed the property issue,” Taylor said.
The first major hurdle facing the Competition Commission, Taylor told just-food, is piecing the way that various competition concerns slot together. “We have to view each issue within the context of the sector as a whole,” he said.
