Tuesday, 6 May 2008

OFT draws a line

I have been amazed at the news in the Retail Bulletin over this last weekend (4 May); they report that Mr John Fingleton, the Chief Executive of the Office of Fair Trading has "accused consumers of being 'schizophrenic' as he attempted to draw a line under the argument that supermarkets were responsible for the closure of local shops", he went on "if shops are closing it is because people don't go and shop in them, and that's not our problem..."

Oh dear, oh dear! We do seem to have made very muddy waters with these arguments about small shops in the food sector, not helped by well intentioned campaigns by lobbying groups who take a fact - distort it, and then feed it back in as testimony. But Dear Mr Fingleton, it is your job - a highly paid job, paid for from our taxes; including the small retailers' - to get behind these stories and to ensure that all aspects of fair competition are exposed, analysed, commented upon and wherever necessary acted upon. It seems to me that Mr Fingleton and Mr Peter Freeman (Chair of the Competition Commission inquiry) have together been in receipt of masses of evidence, claim and counter-claim; it seems also to me that sufficient amounts of this evidence have indicated the real possibility of trading tactics which if they were being carried out by small retailers without the same degree of the power of influence as others in the market place, then they would, by the end of May 2008, probably be liable to prosecution under the Consumer Protection from Unfair Trading Regulations 2008.

The furore over the loss of independent food shops is not merely a case of choice by consumers; in reality it is a range of issues, of which it has to be admitted, some are brought about by the smaller retailers themselves. Smaller retailers do need, so often, to smarten up their acts - but they might argue that almost any strategy they employ to do so would involve expense, and their margins are severely under pressure already; but that is another story. This blog is focussed on unfair trading. It is impossible that the OFT and the Competition Commission inquiry did not receive any plausible evidence of unfair trading - good grief, it is still being provided by the large players themselves. Is it not the case that Wal-Mart ASDA has put forward evidence of wrong-doing so to be able to claim immunity from prosecution themselves, just this week? Did the inquiry discover this when they were sitting? Does this not in itself present evidence that at least one firm was less than forthcoming during the enquiry? Is it not the case that if you do not ask the precise and explicit question of these firms then you will receive imprecise and inexplicit responses?

Dear Mr Fingleton, instead of merely taking the stance that 'if consumers do not shop in a particular place that this is evidence of real choice' try looking at the supply chain dominance using methods of investigation that do not disadvantage to the supplier, try seeking explanations about the impacts of planning policy and how the SME retailer is disadvantaged in terms of place. Try to look at imbalance in the power of influence that exist at local level, at regional levels and most of all at national level between the players . Most of all remember, what is true today of the food stores is rapidly becoming true also of other sectors and that no matter how tedious you imagine this story is ... it is going to be with us for a good while yet!

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