British groceries code adjudicator Christine Tacon told members of Parliament at a committee hearing on Wednesday that she held “no concerns at all" about the proposed multi-billion pound merger of retail heavyweights Sainsbury’s and Asda, according to Retail Gazette.
The regulator said that bigger retailers are often easier to regulate. "If anything, [bigger supermarkets] build it into their systems and are spending serious sums of money making sure they are compliant," she commented.
She gave the example of Tesco's drastic improvement of operations after she published a report detailing its treatment of suppliers two years ago.
Tacon added, “The larger the retailer, the more likely it is to embed what I want it to embed with proper systems and IT investment, the other ones don’t move so fast.
“I am not worried about size because my penalty powers are one per cent of turnover, so the bigger you are, the more it will hurt,” she said.
Tacon said that if the merger is given the go-ahead from the Competition and Markets Authority, she would hope to bring Asda up to Sainsbury’s level (Sainsbury’s is ranked second in the 10 supermarkets she regulates, whereas Asda is second to last).
Groceries Code Adjudicator
In her role as groceries code adjudicator, Tacon monitors and ensures compliance with the Groceries Supply Code of Practice.
She reviews supermarkets and fines them if they treat suppliers poorly or don’t hold to agreements. It is also within her power to make retailers pay an increased or variable levy to support the funding of the adjudicator, depending on their behaviour.
Tacon emphasised that her job does not require her to regulate pricing or competition.
The proposed merger would create one of the largest UK retail groups, placing it in front of industry leader Tesco (with a market share of 27.6%).
Sainsbury's and Asda had the slowest sales of the Big Four supermarkets in the 12 weeks leading up to 22 April, according to Kantar Worldpanel data, with sales rising 0.2% and 1.4% respectively.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up to ESM: European Supermarket Magazine.
