Bakery industry welcomes grocery market review

National Association of Master Bakers (NA) chief executive David Smith said he is on “cloud nine” following the announcement by the Office of Fair Trading (OFT). “It’s the best result you could have hoped for, it’s tremendous,” he said.

The OFT’s decision comes after the Association of Convenience Stores (ACS), the NA, suppliers, consumer organisations and environmental groups highlighted problems caused to small shops and suppliers by the growing dominance of the “Big Four” superstores. The Competition Commission will look at issues including buying power, below-cost selling, price flexing, and the decline in choice caused by the closure of many independent shops.

The announcement follows growing political pressure for a review. The All Party Parliamentary Small Shops Group published a report into the High Street 2015 last month, attacking the “heavily unbalanced trading environment” in the UK. It called for a review of the two-market ruling, which separates the grocery market into top-up (local) shopping and one-stop (supermarket) shopping.

Mr Smith said the NA will urge craft bakers and bakery suppliers to give evidence to the Competition Commission. He said: “Suppliers and bakers have another chance. We know they are being squeezed.”

The ACS first asked the Competition Commission to trigger a review of the market in 2004. This request was refused, with little explanation. In Octo-ber the ACS appealed to the Competition Appeals Tribunal, which told the OFT to reconsider. The OFT will now undertake a four-week consultation on its decision, running until April 6, and, if it is confirmed, the Competition Commission will undertake the review, which could take up to two years.

“This is a landmark ruling for independent retailers and consumers,” declared ACS chief executive David Rae. “But there is a long way to go before we get the hard and fast outcomes that we believe are required, such as better ways of stopping predatory pricing, and greater transparency in dealings between retailers and suppliers.”

Greggs MD Sir Michael Darrington said referral of the grocery market to the Competition Commission was a fair thing to do. He commented: “If we want to have a balance in the high street and in town centres, then we need to help that happen, rather than let market forces totally have their way.”

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