Supermarket role for OFT

The Office of Fair Trading (OFT) could be handed a key role in policing the expansion of the biggest supermarkets when competition regulators publish a long-awaited remedies statement this week in the final stages of a two-year inquiry into the £120 billion grocery market.

The Competition Commission is tipped by retail experts to say a specialist body such as the OFT should be responsible for administering a new so-called competition test or fascia test which could in effect bar major supermarkets from opening new stores in towns where they already have a large market share.

It is expected the commission will say the new competition test will only apply to supermarkets above a certain size and if a chain has a certain percentage of stores. The commission is also expected to confirm that a special ombudsman will be created to police supermarkets’ relationship with their suppliers.

It is also expected to strengthen the voluntary code of conduct between supermarkets and suppliers to stamp out so-called retrospective payments to suppliers in which the latter give retailers discounts for selling their goods.