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Competition watchdog recommends new hurdles to supermarket development

The Competition Commission today revealed it would press ahead with tough new planning rules to make it more difficult for the country’s largest supermarket brands to roll out their aggressive expansion plans.

A competition test that will prevent companies with a strong presence in a particular area shutting out rivals by building more stores or major extensions will be formally recommended to Government, the competition watchdog said.

Under the test, the Office of Fair Trading will advise planning officers on the potential impact of any new development.

Applicants would pass if the retailer was new to the area, or if there were four or more different firms in the market within a 10 minute drive of the proposed site.

Supermarket giant Tesco, the country’s largest grocery retailer, challenged the introduction of the test earlier this year.

The Competition Appeals Tribunal did not oppose the initiative, but requested the watchdog carry out further studies on the impact of such a test.

Further consultation has been conducted since July that has resulted in the commission deciding retailers could carry out extensions of up to about 28 sq m as long as there have been no previous extensions in the past five years.