Tesco stalls over grocery market inquiry

By Anita Awbi

- Last updated on GMT

Related tags: Tesco, Supermarket, Wal-mart

Britain's leading supermarket Tesco is being accused of stalling
the Competition Commission's (CC) grocery sector inquiry by asking
for extra time to provide evidence of its business practices.

Last week Tesco contacted the CC to warn it may not return the regulator's probing questionnaire by the 10 August deadline, according to reports in the Sunday Times.

The questionnaire has been sent out to more than twenty retailers, including the "big four"​ and smaller groups Nisa Today and Spar, but has been tailor-made by the commission to include specific probes relating to each business model.

It is thought the Tesco survey contained around 131 questions about supply chain management, retail competition and land planning practices.

"It's quite a detailed questionnaire, but then it's a detailed inquiry. A lot of the answers we feel should not be too difficult to produce, but this delay is not unusual,"​ a CC spokesperson told FoodandDrinkEurope.com.

"This sometimes happens when we contact big companies for information. They don't always do cartwheels for you,"​ he added.

The CC stressed it is too early to talk about far-reaching delays to the inquiry, whose findings are expected to be published in full by the end of October 2007.

It is currently in negotiations with Tesco to extend the deadline, while the inquiry is still gathering information from other sources.

"We are trying to be as helpful as possible,"​ Lucy Neville-Rolfe, Tesco's company secretary, told the Sunday Times.

"But they have asked for an enormous amount of information. With the best will in the world it will take time to recover this information from the nooks and crannies of the business."

In May the UK's Office of Fair Trading (OFT) agreed to refer the grocery sector to the CC for an in-depth inquiry, following nearly four years of political and industry wrangling.

Under the CC, Britain's whole food retail sector is being subjected to a far-reaching probe into market dominance, land bank practices and pricing strategies.

Together the "big four" - Tesco, Asda, Sainsbury's and Morrison's - currently control 74 per cent of the grocery market, according to TNS figures. Many critics accuse the supermarkets of using their power to squeeze suppliers, pressurise local council planning departments and push smaller competitors out of the market.

Following an official complaint from the Association of Convenience Stores in November 2002, and the ensuing threat of legal action, the OFT was pressured to call the CC in to undergo a formal investigation.

The inquiry is still in the evidence-gathering stage, with testimonials from interested parties being accepted over the coming two to three months.

Related topics: Market Trends

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