Sir Christopher Bellamy, president of the Competition Appeals Tribunal, told the Office of Fair Trading (OFT) that its intention to take a further eight months to decide whether a full inquiry into the grocery market was necessary was “unreasonable.”

Such a timetable would mean that the OFT would have spent 16 months deciding whether to make a referral to the Competition Commission, which might take another two years plus time for further debate over possible actions. Sir Christopher said that the process could take three to four years. “It would be like shutting the stable door after the horse has gone,” he said.

The criticisms cemented a victory for the Association of Convenience Stores (ACS), a trade association representing 32,000 shopkeepers, which had appealed against the OFT’s dismissal of its calls for a full inquiry. The ACS argued that large supermarkets sold items at below the price that it cost to buy them and moved prices up and down in specific localities to unfairly put pressure on independent retailers.

David Rae, ACS chief executive, said: “We are pretty pleased with the result. There will be a new decision and the the tribunal has, in effect, put a time limit on the OFT without stating what that limit is and have given us the power to make that decision.”

Mr Rae said that he wanted to see a decision from the OFT within six months. “At the current rate that will mean another 1,000 small stores will have closed by then,” he said.

Sir Christopher allowed the OFT to withdraw its August decision not to make referral to the Competition Commission on the ground that it had displayed “insufficient reasoning.” He said that the OFT could re-investigate — a process that will include taking new evidence from retailers and other parties — but he wanted a decision before next June. If the OFT was unable to do so, Sir Christopher said that it would be open to further legal challenge.

A OFT spokeswoman said that the regulator “was alive to those criticisms”.

FULL BASKET

• The OFT must decide whether to ask the Competition Commission to launch a full inquiry into the grocery market
• A full inquiry would probably look at whether the regulatory distinction between convenience stores and supermarkets should stand
• If the Commission finds that small shops and supermarkets are part of the same market, it could impose controls on supermarkets
• These controls could include curbs on acquisitions of convenience stores by the big supermarkets

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