Supermarket inquiry means better deal for suppliers

Drinks firms and brewers should be better protected in their dealings with the major supermarkets, after new measures were announced by the Competition Commission today.

However the proposals, following a two-year investigation, still fail to address the issue of below-cost selling which will disappoint the pub trade.

An independent ombudsman will be appointed to resolve disputes between retailers and suppliers and award compensation.

The Competition Commission wants a new, stronger code of practice for the grocery supply chain which will be enforced by the new watchdog.

However, the Federation of Small Businesses (FSB) said the appointment of an ombudsman did not go far enough.

Clive Davenport, the FSB's trade & industry chairman, said: "There are many more issues, such as below-cost selling and free parking for out-of-town shopping centres that the Competition Commission has failed to address properly."

"There is a growing consensus of opinion across Europe that something must be done to protect independent retailers from the damaging effects of the unchecked expansion of supermarkets.

"In the UK it's time for the Competition Commission and the Office of Fair Trading to put out of their misery and for an independent regulator with real power and a wide-ranging retail brief to be set up."

The proposals also includes the creation of a "competition test" for planning decisions involving new, large grocery stores.

The commission also wants to stop supermarkets buying up banks of land to prevent rival chains opening up new stores nearby.

The recommendations are subject to a two week consultation before the final report is produced.