The new coalition Government has set out its plans for the next Parliament, which will include an ombudsman to enforce the Grocery Supply Code of Practice.
The government said an ombudsman in the Office of Fair Trading will “curb abuses of power which undermine our farmers and act against the long term interest of consumers”.
Shore Capital analyst Clive Black said: “Such a body is not likely to have a bearing on industry trading practices and financial performance.”
The government also said it will “seek to ensure a level playing field between small and large retailers by enabling councils to take competition issues into account when drawing up their local plans to shape the direction and type of new retail development”.
Black said: “This proposal possibly introduces a degree of fascia testing into the planning regime and to a considerable degree follows on from the recommendations of the Competition Commission.”
He added: “The devil is always in the detail, but over time this measure may start to impact Tesco among others in their scope to open superstores in certain areas.”
The coalition also said it will “ban the sale of alcohol below cost price and we will allow councils and the police to shut down permanently any shop or bar found to be persistently selling alcohol to children”.
Tesco has today welcomed this move.
Tesco executive director for corporate and legal affairs, Lucy Neville-Rolfe, said: “There is no doubt that price is a factor in the availability of alcohol to a broader range of consumers but the level at which price encourages problem drinking is unproven. Therefore any pricing controls introduced must be carefully considered by government to ensure they are effective. Otherwise the vast majority of sensible consumers could be paying higher prices for no good reason.
“We acknowledge that our own sales of alcohol might be impacted but if these measures have the desired effect of helping to reduce harmful drinking, then it will be worth it.
“So today I welcome the new government’s commitment to act on below cost selling and pledge that we will play a constructive role in government-led action to make this happen. We will also support any future discussions on a minimum price.”
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