The UK grocery market will be subject to tougher regulations if proposals put forward by the country's Competition Commission (CC) are accepted.

The CC spent two years investigating the £120bn UK grocery market and highlighted several anti-competitive practises. Last Friday it published its "remedies" or recommendations which if accepted will help to open up the market.

One of the proposals is a change to the country’s local planning rules which in future could include a “competition test” before new, large stores are approved. This is intended to prevent towns becoming dominated by a single grocery chain and make it easier for other stores to open in the same town. It suggests a ban on land covenants, which have the effect of preventing that land being used for competing stores, and reform of the Land Agreements Exclusion Order.

Another “remedy” is a tougher Groceries Supply Code of Practice (GSCOP) which will be extended to include all grocery retailers with a UK turnover greater than £1 billion. Primarily, it  will require retailers to make further improvements to their dealings with suppliers through the appointment of an in-house code compliance officer. In addition, the CC recommends the appointment of an independent ombudsman to oversee and enforce the Code.

The CC carried out an exhaustive inquiry into all aspects of groceries retailing. It received over 550 submissions, held 75 hearings with main and third parties and published 26 working papers.

The commission's report is its third full-scale inquiry into the supermarket sector in eight years and comes amid mounting concerns over the increasing dominance of Tesco, Asda, Sainsbury's and Morrisons. This latest inquiry was refered to the CC by the Office of Fair Trading (OFT) in May 2006 and the provisional findings were published last October.

Interested parties are invited to comment on the proposed remedies by 7 March.

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