Tesco to appeal Competition Commission findings

LONDON - Tesco will today announce its intention to appeal against findings of the Competition Commission, following its two-year investigation into the grocery sector.

The appeal will be the first of its kind brought to the Competition Commission's appeal tribunal following a markets investigation.

It follows Friday's clash at its Annual General Meeting with Celebrity chef Hugh Fearnley-Whittingstall who won 10% of the vote in his battle to force Tesco to improve how it treats its broiler chickens. The chef needed 75% for the vote to count.

Britain's biggest grocer, which controls 31% of the UK food retail market, is expected to criticise proposals for a "competition test" in the planning system, which the commission included in a report at the end of its investigation in May. The deadline for appealing the findings is today.

The test is designed to protect consumers in areas dominated by a single food retailer, and includes measures to prevent supermarkets from hoarding land in a way that restricts competitors from entering the market.

Tesco is likely to rely on the work of Jerry Hausman, professor of economics at the Massachusetts Institute of Technology. Hausman has written a paper for Tesco refuting the claims of the commission that claim that consumers in an area dominated by one retailer lose out, are not backed up by the evidence or economic theory.

Although the commission found that competition in the grocery sector generally offered benefits to consumers, it said problems existed in local areas where competition among the major supermarkets was limited.

The proposed test is designed to prevent "land agreements" being signed, where supermarkets buy up undeveloped land to stop competitors entering a local market.

The Competition Commission's appeal tribunal will have to determine whether the commission "considered the case fully, followed its own procedures, observed the relevant law, acted fairly and proportionately and without bias, and came to a reasonable decision on the basis of the evidence".

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