UK has set a nice example. The UK government is going to impose a serious penalty to the big superstores which are found to be indulged in using unfair practices to cut down on prices and throw away the small retailers on the street out of competition. Public shame will automatically follow the superstores or retail chains that are penalized under the new regulation.
The UK watchdogs have taken a tough stand against the Supermarkets that have the potential to use their BIG size to force down prices & throw away the small retailers out of business. If found guilty of such malpractices, such giant retail chains will be penalised under a scheme which is aimed at encouraging open and fair market competition and give more & more choice to the customers. The Competition Commission is today expected to recommend changes to discourage chains from developing local monopolies and forcing smaller stores out of business.
Most importantly, the supervision by this ombudsman is will keep a close watch on the relationship between the giant supermarkets like Tesco, Asda, Sainsbury's, Morrisons, and will watch closely their proceedings and relationships with their suppliers.
The recommendations follow a two year inquiry into the £1.23bn grocery sector. Figures suggest the supermarkets' stranglehold has killed off thousands of smaller rivals. The four UK supermarkets alone have a clear-cut 75% UK market share in grocery business.
The ombudsman is expected to have power to fine companies for sharp price cuts, or for charging new products for shelf space and "pay-to-stay" fees to keep goods on shelves. Large retailers who do not meet competition standards could see planning applications refused.
Not only this, the Competition Commission is also learnt to recommend the appointment of a statutory regulator to adjudicate in disputes between retailers over the price they pay to packers, food processors, farmers and dairy firms. If the supermarkets are found to be indulged in any kind of malpractices and bullying act with the suppliers and farmers, they will be heavily penalized. Not only that, the malpractices will be made public and they will be put to public shame.
Here is the news items, a bit shocking, about how these super markets build up their dominance:
The commission's provisional findings have revealed that 200 areas of the country where consumers had little choice of where to shop, dubbed as "Tesco towns". They also discovered chains were buying up swathes of land to stop rivals building competing stores. Suppliers say that they are forced to bear the losses due to retail chain price-cutting promotions.
The commission's plan for a competition test has been fiercely opposed by Tesco; in Bicester near Oxford, the chain has six stores in proximity.
| India already set off on the retail stores journey, where retail stores like Reliance Fresh, More, Spensers, etc. are making dominance in the market, killing out local retail shops. Can we have something similar in India to see how things are working and check the malpractices to have open and fair competition? | Table of Contents |
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