Supermarkets question CC ombudsman

The CC said the move, which follows its two-year investigation into the UK supermarket sector, will improve consumer choice and protect suppliers. The ombudsman will oversee a stronger code of practice that will cover all grocery retailers with a turnover greater than £1bn. "Retailers with good practices and relationships should have nothing to fear," the regulator added.

However, both Asda and Sainsbury's have expressed concern about the cost of setting up and running the ombudsman scheme - a cost, they warned, that could be passed onto the consumer.

Andy Bond, chief executive of Asda, said: "While we welcome its proposals to improve the relationship between retailers and suppliers, the bottom line is that any changes to how the market works must help us to lower prices and deliver an even better deal for customers."

Sainsbury's said the move was unnecessary and issues between retailers and suppliers should be addressed through changes to the existing code of practice.

The CC also announced meaures to ensure better choice between retailers for consumers, with plans to stop towns being dominated by a single retailer.

Going forward, the Office of Fair Trading (OFT) would have to be consulted on all planning applications to build new larger supermarkets or extend existing ones and would apply a "competition test".

The report failed to address the issue of "land banks", areas of undeveloped land held by retailers, as the supermarkets will not be forced to sell such land. But they will not be able to impose any restrictions on what can or cannot be built on land they sell.

l For more on the report, see page 9

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