At first glance the latest report from the Competition Commission's Grocery Inquiry appears to be good news for supermarkets, and particularly for Tesco, which escaped without censure.

The report found that the UK's largest supermarket chain "is not in such a strong position that other retailers cannot compete" and appeared to offer the prospect of easing expansion through a loosening of the planning controls for edge of town development.

However, the commission also made clear that it was concerned about 200 local areas where one large retailer controlled the market and said it would consider forcing retailers to sell land holdings, or even stores, to open the way for rivals.

As the largest retailer, Tesco is likely to suffer the most from such requirements but both Asda and Sainsbury must be concerned about what this would mean for them - the commission indicated that less than half the areas of concern related to Tesco.

In addition, the commission is clearly concerned about relations with suppliers, and even the possibility of collusion on price setting, and so the retailers expect much closer scrutiny of their dealings with manufacturers and farmers.

This inquiry could be more uncomfortable for the big four than it first appears, but the final report is not due out until May next year and it remains to be seen if it will lose some of its teeth by then.

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