Tesco went on the attack against regulators for the second time in months on Monday, announcing it would appeal against a recommendation of the Competition Commission’s two-year supermarket probe.
Britain’s biggest chain, said it was challenging the commission’s proposal for a “competition assessment”. It is already fighting the Office of Fair Trading’s statement of objections that it – along with other retailers and dairy processors – colluded to push up milk prices.
The competition test, which requires local authorities to consider which retailers are already operating in their areas when they consider planning applications, was designed to improve choice for shoppers where one operator dominated.
With many more stores across the UK than competitors, Tesco has the most to lose from a competition test. It could end up restricting it from securing new sites, building on land it already owns or extending some of its 706 supermarket and hypermarket stores.
Lucy Neville-Rolfe, Tesco’s corporate and legal affairs director, said the commission’s recommendation would also hurt competitors by adding another layer of regulation in an already cumbersome planning system.
Under the proposal, the OFT would give advice to local authorities on whether a retailer had passed or failed the competition test.
“It would introduce another planning barrier into the planning process. The bureaucracy involved would increase delays and cost,” said Tesco.
“Planning decisions should be taken by local people who understand what their communities needs, and it is a matter of principle to Tesco that customers, not regulators, should decide where we shop.”
It has lodged its challenge with the Competition Appeal Tribunal, which is likely to hold hearings in the autumn.
The commission has six weeks to respond to Tesco’s 34-page submission to the CAT – it has yet to release any information on Tesco’s case – but said on Monday it would “defend its case vigorously”.
The commission, which published the findings of its probe into the sector in May, declined to comment on what it meant for other recommendations, including the appointment of an independent ombudsman to monitor relations between suppliers and supermarkets, although it is likely that it will press ahead with discussions behind the scenes.