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Competition Commission goes softly softly on Tesco
23rd January, 2007
The Competition Commission - the government body charged with investigating whether companies are stifling competition within markets - has published its 'emerging thinking' document on the actions of the major supermarkets.Peter Freeman, Chairman of the Commission, warned that it did not exist to "punish success or individual retailers," but added that "we are concerned with whether Tesco, or any other supermarket, can get into such a strong position, either nationally or locally that no other retailer can compete effectively."
Of particular concern is Tesco's 'land bank' - a store of undeveloped land across the country which, if built on, could raise Tesco's market share from around 30% at the moment to a competition-stifling 45%.
The Commission confirmed that Tesco has the biggest land bank of all the retailers, but stressed that the issue at stake was how the land holdings were used at a local level. It plans to investigate the issue further, focusing on the amount of time a retailer is allowed to hold land undeveloped.
The preliminary report also voiced concern over suppliers and farmers, and appealed for more submissions.
The Commission's documents are released a week after Greg Lawless, a retail analyst at HSBC, made claims that Tesco was misreporting its profits in an attempt to fool the enquiry as to its real share of the grocery market. His comments were dismissed by Tesco as "outrageous."
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