The Forum of Private Business (FPB) is insisting that the Competition Commission’s new ‘competition test’, which is designed to prevent supermarket chains from monopolising town centres, protects the interests of smaller shops as well as large superstores.

The Commission’s proposals, following its 21-month inquiry into the lack of competition in the £123 billion retail sector, include clamping down on ‘restrictive covenants’, in which the likes of Asda, Morrison’s, Sainsbury’s and Tesco dictate who can build on the land they sell. In addition, regional planning authorities will be required to determine whether a particular chain is dominant before deciding on an application for a new store.

The FPB believes that this could simply open the door for other large retailers to step in, and do little to help smaller shops.

"Finally, after such a long probe, we have arrived at the stage where remedies are being proposed," said the FPB’s Phil McCabe. "The problem, as far as many of the FPB’s members are concerned, is that the Commission got its diagnosis of the retail sector’s problems all wrong in its preliminary findings, which were published in October. Other chains might find it difficult to get a foothold in an area dominated by a rival, but the bigger issue is that small retailers are struggling to survive. Protecting them must be of paramount importance."

The FPB accused the Commission of severely letting down many small retailers, and also suppliers. The latter were given no guarantee of anonymity if they spoke out against the supermarkets’ business practices, leaving them reluctant to give evidence out of fears their businesses would suffer as a result.

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