EXPLOITING BUYER POWER: LESSONS FROM THE BRITISH GROCERY TRADE

By Paul W Dobson

As in the United States, increased concentration in grocery retailing in Great Britain has raised issues about the buying power of multiple retailers.Whether, and if so how, it prevents, restricts, or distorts competition at the retail and/or producer level to the public or consumer detriment has been the central aspect of concern in a number of formal investigations by the British competition authorities over the last couple of decades. These include the industry inquiries conducted by the Monopolies and Mergers Commission in 1981, by the Office of Fair Trading (OFT) in 1984 and 1999, and by the Competition Commission in 2000. Retailer buying power has also featured in certain merger cases, most notably the recent Competition Commission inquiry into Safeway and the contemplated mergers with Asda, Wm Morrison, J Sainsbury, and Tesco in 2003.

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