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FAIR TRADING REMAINS TOOTHLESS IN FACE OF TESCO

October 23, 2008 4:17 PM

Tesco signNick Harvey, MP for North Devon, comments: "Following Tesco and Brian Ford's curious handling of their recent planning application, the Chief Executive of the Office of Fair Trading has made it clear to me that he remains toothless on such matters.'

John Fingleton, OFT Chief Exec, says: "'Pending a Tesco appeal the OFT does not have a statutory role to give advice on competition matters in relation to supermarket planning applications.'

Nick Harvey notes: 'In fact the Competition Commission earlier this year recommended that the OFT have a say, however Tesco is opposing this and the recommendations have yet to be implemented by the Government.

'However, the OFT has informed me that it is investigating whether the acquisition of Brian Ford Discount Store in Barnstaple by Tesco creates a merger situation under the Enterprise Act.'

John Fingleton OFT Chief Exec explained to Nick: "If that is the case, and it causes a substantial lessening of competition, the merger could warrant reference to the Competition Commission, or undertakings in lieu.'

Nick concludes: "The Government has proposals in hand that would give local authorities more scope to refuse out of town developments that threaten the survival of high streets and smaller shops, these though are not expected to come in until next year. In the meantime the OFT remains caught in the middle.'

Notes to Editors:

The Competition Commission's market investigation into the Supply of Groceries in the UK was published on 30 April 2008 and recommended that the OFT be made a statutory consultee to local planning authorities where grocery stores would have a sales area in excess of 1,000 metres.

The Recommendation is currently under consideration by the Government and is also subject to a appeal by Tesco made to the Competition Appeals Tribunal on 30 June 2008.

The Department for Communities and Local Government announced new proposals on 10 July 2008 to strengthen Planning Policy Statement 6: Planning for Town Centres (PPS6), which is part of the Government's town centres first policy. A final planning policy statement is expected in early 2009.