The Competition Commission enquiry has been hijacked in the interests of the supermarkets it was set up to investigate, says nef

Key outcomes from the Competition Commissions provisional findings are a travesty. In fact, it is so bad it is almost comic. Instead of acting to preserve an open market the Commission is suggesting moves that will increase the collective dominance of a handful of supermarkets over UK plc, says nef

Charged with investigating how to break the big four's stranglehold on British retailing, the commission appears to have concluded that the stranglehold should be tightened. In its last major report seven years ago, in spite of concluding that the market had too much power in too few hands and was riven with anticompetitive practices, many of which were contrary to the public interest, the watchdog produced no effective remedies. This time it has gone one step worse

"Supermarket dominance is like a Chinese finger trap and the Commission is pushing us into a situation from which it will be increasingly hard to escape", said nef policy director Andrew Simms, responding to the Commission's release of its provisional findings,

"People want choice about where to shop, and not between supermarkets selling virtually identical goods at virtually identical prices. They want a variety of genuine local shops, small shops and markets - the kind of enterprises that create economically vibrant local communities and provide the social glue that holds neighbourhoods together.  But these enterprises will increasingly go to the wall if the Commission's key proposals go ahead. People don't want to live in ghost communities whose economic hearts have been surgically removed and put into massive out-of-town retail hypermarkets. And, neither do they want to live in clone towns dominated by identikit chain stores," he added.

And, as nef set out in its submission to the enquiry, Detrimental Effects, based on consultation with a range of leading experts in competition law and economics, by taking an over-simplistic view of consumer interest in terms of price, when the Enterprise Act lays down quality, choice and innovation as considerations to be protected - both today and into the future, the Commission risks failing its statutory duty. The Commission's findings also appear confused.  It finds no direct evidence of tacit coordination between the supermarkets, yet only a month ago it found evidence that supermarkets had colluded to fix the price of milk.

"Changing the monitoring of the code of practice by introducing an independent Ombudsman is a good idea, but only if it has the tools to do the job. Coupled with the Commission's other proposals - expecting an Ombudsman to control the market-distorting power of the supermarkets is like sending someone to build sea defences with a feather duster. It's going to be messy, ineffective and potentially dangerous," added Simms

"Seven years ago the Commission warned that British retail was over concentrated. They told us that the supermarkets were guilty of dozens of anti-competitive practices, many of which were against the public interest. Since then things have got worse and the collective dominance of the big four supermarkets has grown bigger. Now, these proposals stand to accelerate what is in effect a retail coup d'etat which has profound implications for our way of life. Time is running out for the regulator. If the Commission cannot now prove that it can do the job for which it was created and is legally obliged to perform - keeping the market open and protecting full choice for consumers today and into the future - they should be abolished and replaced with a regulator who is more in touch with the times," he concluded.