The Competition Commission has launched consultations on two remedies stemming from its investigation of the UK groceries sector, namely:

  • the establishment of an Ombudsman to oversee the functioning of the Groceries Supply Code of Practice (GSCOP); and
  • a draft order aimed at limiting the ability of designated large grocery retailers to prevent land being used by their competitors for grocery retailing in the future. This will be achieved through a requirement that designated large grocery retailers (i) release certain restrictive covenants, (ii) do not enter into new such covenants, (iii) do not enforce certain exclusivity arrangements and (iv) do not enter into new such covenants.

Responses are requested by 28 May 2009 for each of the consultations.

The CC has already consulted on the GSCOP (see our earlier Law-Now on this). As regards the Ombudsman scheme, the CC is requesting that designated retailers voluntarily sign up to undertakings that they will comply with the scheme. The CC notes that while it does not have the power itself to establish the Ombudsman, or make retailers sign up, if they fail to sign up, it will recommend to DBERR (Department of Business and Regulatory Reform) that it takes steps to establish the Ombudsman instead. However, passing the matter to DBERR would be likely to lead to significant delay in establishing the Ombudsman.

As regards the order regarding the control of land, this is to become a statutory instrument so the consequences of failure to comply include injunction proceedings and actions for damages by those suffering loss due to failure to comply.

These proposals show that the CC means to effect changes in the groceries market, so it is important for businesses to consider how they will be affected and whether they wish to have a say in how the proposals progress.

The OFT has also published a provisional recommendation on the selection of software used to calculate drive times which form a crucial part of its market analysis in supermarket cases.

For further details of these developments please click here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 29/04/2009.