Competition and Markets Authority (CMA) – Asda fined in petrol probe– What will be next for the CMA and the Grocery Sector?
A review of competition in the road fuel market has found cause for concern in the growing gap between the price of crude oil when it enters refineries, and the wholesale price when it leaves refineries as petrol or diesel.
The CMA fined Asda £60,000 for failing to co-operate properly with the investigation which concluded competition at the pumps had “weakened” as supermarkets deliberately drove up profit margins.
CMA chief executive Sarah Cardell said: “Drivers buying fuel at supermarkets in 2022 have paid around 6 pence per litre more than they would have done otherwise due to the four major supermarkets increasing their margins…
“This is why we are recommending the UK government legislate for a new fuel finder scheme which would make it compulsory for retailers to make their prices available in real time. This would end the need to drive round and look at the prices displayed on the forecourt and would ideally enable live price data on satnavs and map apps.”
Last month, the CMA ordered supermarket chains Sainsbury’s and Asda to stop blocking rivals from opening stores nearby.
This illustrates the CMA focusing on key areas of the market that have been subject to the most severe costs increases.
Food inflation has also been highlighted as a key concern. A separate probe on competition in groceries prices is set to follow in the next few weeks.
Please see our previous update of 19 May namely:
Competition & Markets Authority (CMA) review of grocery sector supply chains
The CMA’s action to help contain cost of living pressures - GOV.UK (www.gov.uk)
The CMA is indicating that it is “stepping up its work in the grocery sector” to understand whether “any failure in competition is contributing to prices being higher than they would be in a well-functioning market”. The CMA has indicated that it intends to a focussed approach and part of its work will assess which product categories might merit closer examination across the supply chain. Although the CMA’s document does not say as much, it appears that the CMA might be lining itself up to do a market study (depending on the outcome of its initial assessment).
Detail provided is that:
The prices that consumers pay for their groceries are the result of competition at three main levels of the market:
- Competition between retailers, where consumers shop for their products.
- Competition between suppliers who make the products and sell them to the retailers.
- Competition between raw material providers who provide the inputs to food suppliers.
The CMA will work in a targeted way, focusing on those areas where people are experiencing greatest cost of living pressures.
This will be divided up to cover:
First, completing work to assess how competition is working overall in the grocery retail market, drawing on publicly available data and other information.
Second, in parallel, identifying which product categories, if any, might merit closer examination across the supply chain.
The CMA will then engage with a wide range of industry participants, experts, and other stakeholder groups to inform their assessment. An update on this work will be provided over the coming months.
GCA Annual Conference 2023 – registration now open
Registration is now open for the GCA Annual Conference 2023: “A decade of improving fairness for suppliers” which will take place on Thursday 28 September.
This year’s conference will be a hybrid event and will allow participants to join online or in person.
The conference will bring together supplier representatives, designated retailers and other experts to reflect on changes to the grocery sector over the past decade, ongoing challenges, support available for suppliers and future priorities.
To attend this free event, please register your attendance.
European Green Deal: more sustainable use of plant and soil natural resources
The European Green Deal was presented to the EC in December 2019, it has been highlighted as setting in motion a transformation of society and economy.
European proposals put forward 5 July included a new EU Law to increase the value of soil and its resources. The use of technical progress in new genomic techniques, to enable developing climate-resilient crops and reducing the use of chemical pesticides, and by ensuring more sustainable, high-quality and diverse seeds and reproductive material for plants and forests. Finally, new measures also propose to reduce food and textile waste Food waste reduction targets (europa.eu).
Food Waste Targets
Food waste targets are set as for Member States to reduce food waste, by 2030, by 10% in processing and manufacturing and by 30% in retail, restaurant, food services and households. Primary production on farms is not covered by the EU’s plans. However, campaign groups said the moves fell well short of the UN targets of reducing waste by 50% by 2030.
The package completes the previous proposals under the ‘natural resources' pillar of the Green Deal.
New Genomic Techniques (NGT), such as Genome Editing that has been introduced in the UK via the Genetic Technology (Precision Breeding) Act 2023, enable precise and targeted modifications in the genetic material of plants. They are different from Genetically Modified organisms (GMOs) because they don’t use foreign DNA from other products. These new techniques are used to create the same plants that could occur in nature or be created through conventional breeding but in shorter time spans and in a more efficient and targeted manner. They are stated to assist towards developing improved plant varieties that are climate resilient, pest resistant, that require less fertilisers and pesticides and can ensure higher yields, helping to cut the use and risk of chemical pesticides in half, and reducing the EUs dependency on agricultural imports.
In most cases, these new techniques lead to more targeted, precise, and faster changes than conventional techniques, while growing a crop that is the same as what could have been achieved with classic techniques like seed selection and crossbreeding.
proposal New techniques in biotechnology (europa.eu) will:
- establish two categories of plants obtained by NGTs: NGT plants comparable to naturally occurring or conventional plants, and NGT plants with more complex modifications;
- both categories will be subject to different requirements to reach the market taking into account their different characteristics and risk profiles. The plants from the first category will need to be notified. The plants from the second category will go through the more extensive process of the GMO directive;
- give incentives to steer the development of plants towards more sustainability;
- ensure transparency about all NGT plants on the EU market (for e.g., through labelling of seeds);
- offer robust monitoring of economic, environmental and social impacts of NGT products.
For more information, please visit:
European Green Deal: sustainable use of natural resources (europa.eu)
The new law aims to cut red tape and allow easier market access for plants grown with “new genomic techniques” (NGTs), which target specific genes without necessarily introducing genetic material from outside the breeders’ gene pool. Reportedly, the obligation to label foods as “GMO” will no longer apply to these “conventional-like” plants, and they won’t be subject to risk assessment by food safety regulators.
Defra stalls on food waste targets
In the interim, Defra has stepped back from proposals to force companies to report on food waste and has “no plans” for mandatory targets for prevention, according to reports in the Grocer this week.
A letter to campaigners, sent by environment minister Rebecca Pow, reportedly states Defra officials are taking no action despite a consultation ending a year ago on plans first promised by ex-Defra environment secretary Michael Gove in 2018.
Defra officials were reportedly “currently analysing responses” to the past consultation and while the government has secured the ability in the Environment Act to impose mandatory targets, Rebecca Pow said there were “no plans at this time to utilise these powers”.
The National Audit Office has also reported on waste targets this week, referencing the lack of activity around the 2018 strategy – called ‘Our Waste, Our Resources: A strategy for England’ – around reducing waste sent to landfills and incineration.
A Defra spokesman responded to the NAO: “We are pushing ahead with our programme of reforms to reduce waste and improve our use of resources – building on our commitments clearly set out in our Environment Improvement Plan earlier this year. This includes introducing a deposit return scheme for plastic and metal drinks containers from October 2025, implementing consistent recycling between different councils to boost recycling rates and banning the supply of single-use plastics like plastic plates and cutlery from October 2023.”
Deadly diet pill jail sentence
A gym proprietor received a 37 month prison sentence at Stirling Sheriff Court after admitting distributing potentially deadly diet pills he had created in his garden shed. The pills contained a highly toxic industrial chemical called 2,4-dinitrophenol – commonly known as DNP, which can kill or cause very serious side- effects if ingested.
The sentencing came as a result of a joint investigation between Food Standards Scotland’s Scottish Food Crime and Incidents Unit (SFCIU), Police Scotland and Falkirk Council’s Environmental Health department. The case is the first of its kind involving DNP to be prosecuted in Scotland and is the first major criminal investigation to lead to a conviction for the SFCIU.
Egg producers and Charities warn against Trans Pacific Partnership deal undercutting Eggs & Hen Welfare
The British Egg Industry Council, Compassion in World Farming and the RSPCA have joined forces to urge the UK government to reconsider its decision to exclude eggs as a sensitive sector in the recently agreed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The government has ignored industry warnings that the deal allows the import of eggs from countries using conventional battery cage systems that were made illegal in the UK in 2012 as the agreement allows for import tariffs on eggs and egg products to be phased out over a 10-year period. The danger to British consumers is that egg products could be imported from countries like Mexico, which almost exclusively relies on battery cages for egg production. Such imports would undercut British egg producers who operate to significantly higher standards of animal welfare and world-leading food safety standards under the British Lion Code of Practice.
The CPTPP deal is expected to be signed on 16 July.
Charity Sustain highlights livestock farming as threat to rivers
Food and farming charity Sustain has launched a publicity campaign to ‘Save our Rivers’ after revealing research showing industrial livestock farming in the UK produced more than 50,000 tonnes of untreated excreta each day. Tell your council to save our rivers from the spread of factory farms | Sustain (sustainweb.org)
Sustain have highlighted industrial farms along the Wye Valley alone produce 2,500 tonnes of untreated excreta every day.
Sustain has called on councils “to introduce local planning regulations to require all livestock developments to prove that they are contributing to reversing, rather than exacerbating, pollution and biodiversity decline, and to tackle the climate emergency”.
The campaign is also demanding that national government reforms planning policy to put climate change, nature and biodiversity decline at the heart of considerations for all applications. This would mean the most polluting industries would be required to disclose the harm they cause at planning stage and could be rejected where there was clear evidence of damage.
The Environment Agency position on farming and water and enforcement action can be found via Working to reduce pollution from farming - Creating a better place (blog.gov.uk)
ASA Ruling – ‘Leading’
The home page of a cosmetic surgery clinic website, was held to be misleading in their claim they were “a leading expert in cosmetic surgery and breast surgery.”
The Belvedere Clinic Ltd - ASA | CAP
Two complainants, including the JCCP Trustee, pointed out that no means of verification were provided for the claims “one of the most successful cosmetic surgery companies in the UK today” and “a leading expert in cosmetic surgery and breast surgery”, challenged whether these were misleading.
The CAP Code required that marketing communications that include a comparison with an identifiable competitor must objectively compare one or more material, relevant, verifiable and representative features of those products, which may include price.
The ASA considered the claims “one of the most successful cosmetic surgery companies in the UK today” and “a leading expert in cosmetic surgery and breast surgery” would be understood by consumers to be a comparison with identifiable competitors. As such, the claims should have compared one or more features of their service, and a means of verifiability should have been provided.
Belvedere Clinic said the claims they were “a leading” and “one of the most successful” cosmetic surgery companies were based on the longevity of the company and that information was made clear on their website.
Where verification was needed, marketers should include, or direct consumers to, sufficient objective information and data to ensure that they can check accuracy for themselves. Although the ad mentioned the age of the clinic, it was unclear that this information was linked to the “leading” and “successful” claims. In addition, claims such as “leading” and “successful” were more likely to be understood as references to turnover and expertise, rather than the age of the establishment. Evidence to support the claims as they were likely to be understood was not made available the complaints