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Competition And Retailing

Volume 84: debated on Wednesday 23 October 1985

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asked the Secretary of State for Trade and Industry if he will make a statement on Government policy following the Director General of Fair Trading's report on competition and retailing.

The Parliamentary Under-Secretary of State for Trade and Industry
(Mr. Michael Howard)

A full statement was made by my predecessor on 28 June, stating the Government's policy in the light of the Director General's report.

Does the hon. Gentleman accept that there is widespread concern that the Binder Hamlyn report seriously underestimated the power of the monopoly purchaser in the market place through the operation of the discriminatory discount system? If the hon. Gentleman will not legislate to protect the small retailer, will he at least consider setting up a voluntary code of practice, or is he merely prepared to stand idly by and let our network of small retailers, especially those in rural areas, simply wither away?

The question of a code of practice is one for the trade itself to consider, although it would be essential for such a code not to conflict with the requirements of our competition legislation.

Will my hon. Friend confirm that his Department has not received any complaints from consumers or consumer organisations about the level of competition in retailing? Is it not a fact that consumers throughout the country are enjoying great benefits from the Government's competition policy?

I welcome the Minister to his new responsibilities. I put it to him that there is a simple question at the base of this apparently complicated matter. The market share of the four major supermarket groups has risen, the number of small independent grocers has fallen and the discriminatory discounts which are the cause of the problem have grown in size. Are the Government prepared to sit back and allow this to continue?

The extent to which the market share has increased is diminishing. The hon. Gentleman is asking the Government to take action that would increase the prices that consumers pay. I think that such action would be difficult to justify.