If the Competition Commission does not act decisively this time round, Britain risks being turned into a one-supermarket state

The forthcoming Tesco agm will be a focus not just for the supermarket's established critics but also a new and growing contingent of detractors. Even The Sun has taken a pop at Tesco recently with a piece claiming the retailer had destroyed the viability of the East End market where its own founder Jack Cohen originally started up. The message was clear: if Jack Cohen were starting out today he'd have to find another business, because Tesco would be in his way.

But it is not just the power of Tesco that people are concerned about - it's all four of the top multiples that stand accused of pulling the ladder up behind them. That's why those of us who want stronger UK competition policy are focusing our hopes on the Competition Commission Inquiry.

The inquiry has the power to ensure markets are kept genuinely open to new and independent enterprise. But we fear the Commission is taking an over-simplistic view of consumer interest, as if all consumers were the same - and as if their only interest lay in the price of goods now.

How sophisticated is the Commission's understanding of what consumers really want? If all it does is simply tot up the prices, and assume this is the only measure required, then any of us could do the same.

Then there's the question of what constitutes real choice. With so many supermarkets selling identical goods at identical prices, the Commission's rule of thumb that choice is the result of having three different supermarkets within a ten-minute drive-time looks like a highly impoverished definition of choice.

The danger is that the regulator does not count the extra value that genuine local shops provide in terms of economic benefit and the social glue that holds communities together.

The truth is that the accelerating collapse of independent shops, the lack of new entrants into the market and the stranglehold the big four hold over their suppliers - why else would they accept a payment period of 90 days - are prima facie evidence of a market that is not competitive.

The abuses identified by the Commission in 2000, and still unresolved - up-front payments by suppliers, below-cost selling to force out popular local stores - are all evidence of the disparity in power between the big four and their local competitors.

Being able to force an extra two months to pay their bills means that the big four enjoy the massive advantage of a three-month interest-free loan equivalent to their entire stock. Who can compete with that?

This is worrying for the economic survival of our high streets and towns, because research consistently confirms that new supermarkets are now net destroyers of jobs and are funnelling local spending power out of the area. Unless the Commission acts decisively this time, the big, centralised logistical operations of the supermarkets will continue to drive the homogenisation of business, shopping, eating, farming, food, the landscape, the environment and our daily lives.

At worst, the end game could be Britain turning into a one-supermarket state. At best, the outcome will be the ever more entrenched collective dominance of the big four.

If the Commission doesn't do its job and put in place the checks and balances that could guarantee genuinely open markets, people will be justified in asking exactly what it exists for.n

Andrew Simms is author of Tescopoly and policy director of the New Economics Foundation

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