The UK's competition watchdog has unveiled a planning shake-up in a bid to boost competition in the £95 billion grocery market.

The culmination of the Competition Commission's two-year probe into the sector will see a new 'competition test' in planning decisions on larger stores as well as action to prevent land agreements restricting competitors from entering the market.

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The UK's four biggest supermarkets - Tesco, Sainsbury's, Asda and Morrisons - all came under scrutiny in the investigation.

The report recommends a new independent ombudsman to enforce a strengthened Groceries Supply Code of Practice, to replace the existing supermarket code.

The commission concluded that while grocery retailers delivered a good deal for consumers "in many respects", action was needed to improve competition and the relationships between retailers and their suppliers.

Competition Commission chairman Peter Freeman said: "The size of the market, the number of parties involved and the range of issues examined all mean that this has been a major inquiry.

"We have looked extensively and listened very carefully when looking at all the matters raised with us but our overriding concern throughout has been whether the market is working well in the interests of consumers.

"In many important respects, consumers are receiving the benefits of competition, such as value, choice, innovation and convenience, but we need to take appropriate action to address those areas where they could be served better and where their interests could be damaged in future.

"We have been very careful to ensure that our actions match the scale of the problems we have identified."

Copyright Press Association Ltd 2008, All Rights Reserved.

10:25am Wednesday 30th April 2008

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