Read the findings of the Competition Commission

Small businesses today accused the Competition Commission of letting them down for a third time after a report found UK supermarkets not guilty of bullying small shops and suppliers, restricting competition and limiting choice for consumers.

An 18 month-long investigation of the £128 billion industry by the Competition Commission – the third inquiry in seven years - held back from appointing an independent ombudsman to police the relationship between supermarkets and their suppliers.

It suggested only limited changes to require the leading retail groups to sell off their extensive land banks.

BACKGROUND

• Watchdog to demand an end to planning of ‘Tesco towns’

• Sainsbury's deadline as Delta seeks new funds

• Tesco brain drain claims fifth senior executive

• Online sales of groceries predicted to double

• Waitrose lambasts giant for crushing rivals

Advance of the cut-price stores

European low-cost chains such as Aldi, once seen as supermarkets’ poor relations, are winning over the middle classes

BACKGROUND

• Supermarket ‘bullies’ face crackdown

• Supermarkets accused of fixing dairy prices

• Tesco slammed over Slough store domination

• Tesco faces inquiry over plans to buy stores from Somerfield

• Competition watchdog looks at supermarkets

Tesco gets ditched, but don’t despair

The next few months could be a tricky period, as shares are not cheap, but Sir Terry Leahy has proved to be a slick operator

Related Links

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In the City, supermarket shares climbed higher in early trading as the market absorbed the reports favourable findings. Tesco bounced up almost 3 per cent as fears of draconian actions receded.

Small businesses today reacted with dismay at the findings.

Matthew Knowles, spokesman for the Federation of Small Businesses, said: “This is the third inquiry in seven years but sadly it is not third time lucky. The initial findings miss the point entirely. Competition between the big four supermarkets is not the same as free and fair competition across the whole grocery sector.”

He added: “Small retailers and suppliers are being squeezed out because of practices such as selling items below the cost of production, bullying suppliers and increased parking charges in the high street compared to free parking at supermarkets.

“Once again the shopping public as well as small retailers and suppliers have been let down by the Competition Commission.”

Nick Bubb, an analyst at Pali International, said: "It was a bit of a damp squib, with no ombudsman plan and no protection for consumers.

"Basically they will be allowed to open even more stores, although there will be a bit of a reshuffle and a few sales here and there."

Shares in Wm Morrison Supermarkets, Britain’s fourth largest supermarket group, rose more than 2 per cent, while the number three group, J. Sainsbury, traded nearly 1 per cent higher.

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