Liam has welcomed news that the Office of Fair Trading has signalled its intention to refer grocery retailers, including Tesco, to the Competition Commission for more detailed investigation, and has published a report detailing the scale of profits showing the size of the its analysis of the market for consultation prior to a final decision in April.

Groceries - defined as food, pet food, drinks, cleaning products, toiletries and household goods - account for nearly half of all retail sales. Total grocery sales in 2005 were around £95 billion, representing around 13 per cent of all household spending in the UK.

The OFT highlights ‘features of the market which… distort competition and harm consumers.’

In particular, the evidence suggests that:

the planning regime, and in particular the 'needs test' acts as a barrier to entry, making it difficult for new stores to open and compete with those already in the market big supermarkets appear to have significant land banks which could, coupled with the planning system, aggravate barriers to entry or otherwise harm consumers in some instances, supermarkets have attached restrictive covenants in selling sites. There is also some evidence to suggest that the big supermarkets' buyer power has increased, and that there are aspects of the big supermarkets' pricing behaviour - below-cost selling and price flexing - which could distort competition.’

Liam said

‘I’m glad to see the OFT are finally acting on this matter. The huge power of megastores like Tesco could ruin smaller shops in Hodge Hill. I just can’t see it being the trigger to regeneration that the Lib Dem / Tory council does – this is especially sad when they are looking to sacrifice our green fields.”