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Supermarket powers to be curbed Supermarket powers to be curbed
(30 minutes later)
Suppliers will get better protection in their dealings with big supermarkets to ensure fair competition.Suppliers will get better protection in their dealings with big supermarkets to ensure fair competition.
An ombudsman will be appointed to resolve any disputes between retailers and their food suppliers, the Competition Commission recommends.An ombudsman will be appointed to resolve any disputes between retailers and their food suppliers, the Competition Commission recommends.
They will have the power to award compensation and will uphold a tougher supermarket code of practice (SCOP).They will have the power to award compensation and will uphold a tougher supermarket code of practice (SCOP).
Proposed changes to the planning law could also give shoppers a wider choice of supermarkets in their local areas.Proposed changes to the planning law could also give shoppers a wider choice of supermarkets in their local areas.
The proposals come after a two-year investigation into the UK's supermarket sector, which is dominated by four major chains - Tesco, Asda, Sainsbury's, and Morrisons.The proposals come after a two-year investigation into the UK's supermarket sector, which is dominated by four major chains - Tesco, Asda, Sainsbury's, and Morrisons.
Planning changesPlanning changes
The changes could help farmers and consumers, but does little to ease the plight of small shopkeepers on the High Street. The proposed changes could help farmers and consumers, but would do little to ease the plight of small shopkeepers on the High Street, campaigners said
class="" href="either url here">Shake-up at a glance class="" href="either url here">Reactions to report "The proposed remedies should help farmers provided that the ombudsman is given sufficient powers to deal with the supermarkets' bully behaviour," said Friends of the Earth supermarket campaigner Sandra Bell.
Shake-up at a glanceReactions to reportPress release in full
The plan includes measures to stop retailers imposing restrictions on who can build on land they sell off.The plan includes measures to stop retailers imposing restrictions on who can build on land they sell off.
There is also a five-year time limit on the agreements between supermarkets and local authorities that prevent rivals setting up shop nearby. There is also a proposed five-year time limit on the exclusivity agreements between supermarkets and local authorities that prevent rivals setting up shop nearby.
However, the plans do not require supermarkets to sell land or stores.However, the plans do not require supermarkets to sell land or stores.
Critics said the plans would only encourage competition between the big chains and lead to more large out of town superstores.
"Real competition comes from promoting a range of choices from large supermarkets to smaller shops not just by encouraging the big chains to face off against each other," said Luke Herbert, head of UK public policy at the Royal Institution of Chartered Surveyors.
Tougher codeTougher code
The SCOP, which sets out how supermarkets should treat their suppliers, was created in response to the Competition Commission's last major investigation into the grocery sector in 2000. The code of practise, which sets out how supermarkets should treat their suppliers, was created in response to the Competition Commission's last major investigation into the grocery sector in 2000.
COMPETITION COMMISSION Summary of findings [249 KB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader here
A new version will be created which includes all grocery retailers with turnover greater than £1bn.A new version will be created which includes all grocery retailers with turnover greater than £1bn.
"The farming industry will welcome an ombudsman," said farmer Mike Smales.
"We've seen the power of some of the bigger operators grow consistently over a period of time. We really need to redress the balance."
Supermarkets will have to employ compliance officers to make sure the code is followed.Supermarkets will have to employ compliance officers to make sure the code is followed.
The new code will protect suppliers from supermarkets changing the terms of agreed supply contracts.The new code will protect suppliers from supermarkets changing the terms of agreed supply contracts.
Often, even after a farmer had agreed to a contract price with a supermarket, if the store decided to buy produce, he would be forced to accepted a lower unit price. Often, if the supermarket decided to buy more produce from a farmer, he would be forced to accepted a lower unit price even if the farmer had already agreed contract price with a supermarket.
'Time-consuming'
Interested parties now have a fortnight to comment on these recommendations before the final report is published in April.Interested parties now have a fortnight to comment on these recommendations before the final report is published in April.
'Too few supermarkets' The British Retail Consortium, which represents retailers, said the investigation had been "costly and time-consuming" for retailers.
"It's time retailers were allowed to get on with delivering for customers," said BRC Director General Stephen Robertson.
According to market research group TNS Worldpanel, the UK's big four - Tesco, Asda, Sainsbury's and Morrisons - now account for more than three-quarters (76.2%) of the grocery market.According to market research group TNS Worldpanel, the UK's big four - Tesco, Asda, Sainsbury's and Morrisons - now account for more than three-quarters (76.2%) of the grocery market.
In October, the commission concluded that there were aspects of the grocery market that prevented or restricted competition. In October, the commission concluded that there were aspects of the grocery market that prevented or restricted competition although it said the sector was delivering a good deal for customers.
It said many people had too few large supermarkets to choose from in their local area which acted as a barrier to competition.It said many people had too few large supermarkets to choose from in their local area which acted as a barrier to competition.
The commission also said it was concerned about retailers being able to transfer unexpected costs to their suppliers.The commission also said it was concerned about retailers being able to transfer unexpected costs to their suppliers.