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Supermarkets must be more competitive

More action is needed to improve competition in a number of local areas according to the latest stage of the Competition Commission's (CC) inquiry into the groceries market.

The provisional findings also highlighted the need to look closely at the relationships between retailers and suppliers.

The CC said when there is a lack of competition in some areas, supermarkets can weaken their offer to consumers nationally as well as the situation being an issue for consumers in that area.

The report also pointed out that some retailers may be using restrictive covenants and land holdings to "frustrate potential competition".

The CC added it was concerned about the way supermarkets transferred excessive risk and cost to suppliers through methods such as making retrospective changes to the supply agreements.

The CC said it would look at a range of methods to address its concerns before it publishes its final remedies. It is considering measures such as ordering changes to the planning system to allow greater competition and choice.

 
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