Oral question asked in the House of Commons, by Lindsay Hoyle (Labour). It was answered on Thursday, 6 December 2007 on behalf of the Department for Environment, Food and Rural Affairs.

Food Producers

Question: I am sure my hon. Friend is aware that part of the major problem we face is the power of the big four squeezing down farm gate prices and putting farmers out of business. That kind of competition needs to be examined closely, as should the power of supermarkets that hold land and prevent other companies from using sites because they will not sell them.

Answer: My hon. Friend is absolutely right, and I can tell him that the Competition Commission has concluded that some retailer landholdings and practices such as restrictive covenants may indeed hinder competition. The commission says that a variety of means could be applied, and we will consider them at the appropriate time. It suggests that grocery retailers might divest themselves of their landholdings; that they could be prohibited from using restrictive covenants that reduce the likelihood of land being used by a competitor; that changes could be made to the planning system that would provide more opportunities for developments on the edge of town centres while maintaining constraints on out-of-town developments; and that it might be possible to introduce a competition test allowing the local position of grocery retailers to be considered in the making of planning decisions. Those are all important initial findings, and as I said, we will take them into account if and when recommendations are made to the Government.

Secondary information