Planning test to safeguard competition could cost 25,000 supermarket jobs - The Telegraph UK

Planning test to safeguard competition could cost 25,000 supermarket jobs - The Telegraph

Twenty-five thousand new supermarket jobs will be blocked over the next decade if the Government's proposed Competition Test goes ahead, the industry has warned.


By James Hall and Richard Fletcher
Published: 8:00PM GMT 01 Jan 2010

The controversial planning test – which is designed to stop any supermarket from becoming too dominant in any area – would also have prevented 5,000 jobs from being created between 2006 and 2008 if it had been in place.

Some 2,800 of those 5,000 jobs would have been at supermarkets other than Tesco, whose significant market share the test is presumed to be aimed at hobbling, according to industry research.
Of the 2,200 jobs that would have been blocked at Tesco, around 700 would have been at two Government-endorsed regeneration partnership stores in Port Glasgow and Haydock on Merseyside. Regeneration partnerships are a key job-creation initiative which focus on the socially disadvantaged and long-term unemployed.

Retail workers have been hard hit by the downturn, and unions are likely to be highly critical of any initiatives that would prevent jobs from being created. The number of shop assistants claiming benefits has risen by 87,700 since the start of the downturn.

The Competition Test was a key proposal of the Competition Commission's 2008 investigation into the groceries market. The proposed test, which has yet to be implemented, would mean that retailers with a 60pc share of a local market would be blocked from extending stores or opening new ones.

Lucy Neville-Rolfe, executive director of corporate and legal affairs at Tesco, said that some 2,500 jobs per year will be blocked if the test is implemented. Over a decade, this would be almost equivalent to the entire workforce of Woolworths before its high street stores collapsed in November 2008. "The competition test would put jobs on the line and diminish local democracy. If the test had existed in the past, the Tesco regeneration partnership stores in Haydock and Port Glasgow would have been blocked," said Ms Neville-Rolfe.

"Two and a half thousand retail jobs a year would be lost if the test goes ahead, some of them in Britain's poorest communities."

The Competition Commission published its final report into supermarkets in April 2008. The antitrust watchdog found that the UK groceries market was broadly competitive but proposed a raft of remedies, including an extended supplier code of practice, an industry ombudsman, remedies affecting restrictive covenants and the introduction of the Competition Test.

While retailers such as Asda and J Sainsbury support the Competition Test, Tesco opposed it and appealed to the Competition Appeal Tribunal (CAT). The CAT upheld the appeal last year, saying that the Commission had failed to address its proportionality and effectiveness. However, last October the Commission recommended that a tweaked version of the test be implemented.