Bakers have welcomed news this week that the Office of Fair Trading (OFT) will refer the supply of groceries by UK retailers to the Competition Commission (CC) for investigation.
National Association of Master Bakers (NA) chief executive David Smith told British Baker: “This is a lot more than we dared hope for. There will be a full inquiry.”
The decision is thanks, in part, to the All Party Parliamentary Small Shops Group’s report on the future of the high street, to which the NA contributed, he said (British Baker, February 17, pg 5).
The Scottish Association of Master Bakers (SAMB) CE Kirk Hunter said the SAMB will follow the progress of what is expected to be a two-year inquiry very closely. He said: “These things are never quick, but we want a thorough investigation.”
The news comes after a public consultation by the OFT, to which over 1,200 responses were received, most of which supported a review.
Evidence compiled by the OFT suggests the planning regime acts as a costly barrier to entry, making it difficult for new stores to open. Also, the big supermarkets’ buying power has increased, and aspects of their pricing behaviour – such as below-cost selling and price flexing – could distort competition.
John Fingleton, CE of the OFT, said: “This will allow the CC to examine in detail all aspects of the grocery sector.”