Tesco has lambasted the Competition Commission after it moved one step closer to implementing the controversial competition test.
Today, the Competition Commission published its provisional findings and found that consumers would benefit from the competition test, which would block developments by retailers that already have a strong presence in an area, in favour of rivals.
The Competition Commission has been analysing the benefits and costs of the test, following a ruling by the Competition Appeal Tribunal earlier in the year. Tesco won an appeal against the test after the Competition Appeal Tribunal found that the Competition Commission did not fully assess whether the test might have a negative impact on consumers.
Tesco executive director Lucy Neville Rolfe said: “At the end of their two year inquiry the Competition Commission found that on the whole competition in the UK groceries industry is effective and delivers good outcomes for consumers. Therefore to continue to recommend a burdensome competition test is a misguided proposal that will cost jobs by deterring investment in the areas that need it most, in what is already a challenging climate.
Neville Rolfe added that Tesco was “concerned” that the Competition Commission’s findings are based on “far-fetched assumptions which don’t reflect the reality of the planning system”.
Under the test, getting planning permission for a new store would be based on a retailer’s existing market share in the local area.
She said: “It assumes it is easy to find sites and there will be no delays in attracting replacement developments, when anybody who is familiar with the planning system and the property market knows this does not reflect the reality. In any case, the Government’s own proposals to streamline the planning system make it easier for new entrants.”
However, Asda said that anyone opposing the Competition Test is opposing more competition.
A spokesman said: “Now more than ever, it is essential that consumers have the widest possible choice of supermarkets to do their shopping in. The Competition Test will do just that, helping hard-working families access lower prices and giving them greater choice. Promoting competition is in the long-term interests of everyone in the UK economy.
“The suggestion that the test could cost jobs by deterring investment is simply wrong. Retailers like Asda are keen to invest in regenerating town centres across the UK, it’s simply that in many places we are prevented from doing so.”