Tesco wins appeal against stores ban

by Sarah Crawley-Boevey, Brand Republic 05-Mar-09, 08:55

LONDON - Supermarket giant Tesco has won an appeal against moves to stop retail chains achieving a local monopoly.

Yesterday's decision by the Competition Appeal Tribunal (CAT) overruled a proposal drawn up last April by the Competition Commission that said any new supermarket would be subject to a retailer's existing market share in the area.

But the decision has infuriated local shopkeepers who are already angry that Tesco takes on average £1 in every three spent on groceries on the high street.

Critics claim Tesco is using its financial clout to drive away small, independent stores and reducing choice for the consumer.

Supporters of the Competition Commission's plans include Asda, Waitrose, Marks & Spencer and the Association of Convenience Stores.

But Tesco bosses have argued the opposite, saying the original ruling was taking decision-making powers away from the shopper and placing it with the local council planning departments, who would have the power to refuse new supermarkets had the proposal been carried.

The Competition Commission's proposal would have prevented stores from opening within a 10-minute drive of three or fewer operators, and where the new store would have taken the operator's local market share to above 60%.

Tesco currently has more than 2,000 stores in the UK and says it plans to add two million sq ft to its empire by April 2010.

The Competition Commission, responding to CAT's verdict, said: "The appeal was upheld on the narrow grounds that certain considerations about how the test would work and its costs and benefits should have been explored further in the report."

It said it would now "study the judgement closely before deciding our next steps".

Comments

patrick morrison - 05/03/2009

It is clear in many many towns and cities have been "Tesco'd" or Asda'd or "Sainsburied" ....... and in those places all the local green grocers/butchers and fishmongers ultimately close down...it is visible and measurable and too late to reverse the crippling effect that Tesco alone has had. Tesco has an aggressive expansion policy for super sizing existing stores and putting new mini stores wherever it can get a grip throughout the UK. The Competition Commission clearly are not doing their job on this semantic decison about who has the shopping decsion. Ultimately Tesco is taking decison away from shoppers: thats what being "Tesco'd" is , you are left with one place to shop! This phenomenon also applies to any other of the supermarket chains who have the potential to do the same and for the Competition Commission to not act upon this accordingly is a travesty.

Stew M - 05/03/2009

To quote Bill Baily - Hey, ASDA, I aint gonna be your bitch!

John Gallen - 05/03/2009

Everyone should read 'Tescopoly'. Clearly no one in the competition commission has....

Justin Driskill - 05/03/2009

first they rule against kangaroo, now they rule for tescos? I don't think the Competition Commission is really thinking about what is good and bad about competition.