Coronavirus - UK competition laws relaxed so that supermarkets can share data and ‘feed the nation’

Profile picture for user ddpreez By Derek du Preez March 20, 2020
Summary:
The British government is temporarily relaxing competition laws so that supermarkets can work together to help ensure supply meets demand.

Image of a supermarket
(Image by Alexas_Fotos from Pixabay )

As the Coronavirus pandemic continues to escalate and stricter social distancing measures are introduced, in the UK (and globally) we have seen supermarkets and retailers struggle to keep up with increased demand for goods and produce. We at diginomica have continued to highlight the unprecedented challenge facing omni-channel retailers, which are faced with huge pressures in-store and online. 

As my colleague Stuart Lauchlan noted earlier this week, ironically the UK is more mature in many respects than the US when it comes to omni-channel retailing, which has left it particularly vulnerable. 

However, in another unprecedented move, the British government this week revealed that it will be temporarily relaxing elements of its competition law as part of a package of measures to allow supermarkets to “feed the nation”. 

The relaxation of legislation will allow retailers to share data with each other on stock levels, cooperate to keep shops open, or share distribution depots and delivery vans. 

It will also allow retailers to pool staff with one another to help meet demand. 

Regulations around drivers’ hours are also being relaxed so that retailers can deliver more food to stores. 

It should go without saying, but the government is also urging people to shop considerately (if people stopped hoarding and panic buying, there wouldn’t be any of these problems). 

However, it’s going to be interesting to see how the supermarkets and retailers react to the change in legislation and how they can utilise the new capabilities to respond to the pandemic. Could we, for example, pooled and centralised data made available to the general public about stock levels and availability? Perhaps that’s unlikely, but the retailers will likely be working hard to figure out ways to enable a more consistent shopping experience. 

Andrew Opie, Director of Food & Sustainability at the British Retail Consortium, said:

We welcome this important decision by the government to give retailers greater flexibility to work together to tackle the challenges posed by coronavirus. Retailers have been working hard to ensure shelves are stocked and this is an exceptional step taken by government to help retailers and their suppliers cope with problems that might be caused by widescale absences across the supply chain.

This is a short term measure, in the spirit of working together, and will allow retailers to agree common specifications for products to bolster food production, and co-ordinate certain operations to ensure customers anywhere in the UK have access to the essential items they need.

Legislation will be laid shortly to amend elements of the Competition Act 1998, which prevents certain types of anti-competitive behaviour. The government said that this will be a specific, temporary relation to enable retailers to work together for the sole purpose of ‘feeding the nation during these unprecedented times’. 

The Environment Secretary said that despite these measures the UK’s food supply chain remains resilient and that there are ongoing discussions occurring across industry.

Environment Secretary George Eustice said:

We’ve listened to the powerful arguments of our leading supermarkets and will do whatever it takes to help them feed the nation.

By relaxing elements of competition laws temporarily, our retailers can work together on their contingency plans and share the resources they need with each other during these unprecedented circumstances.

We welcome the measures supermarkets are already taking to keep shelves stocked and supply chains resilient, and will continue to support them with their response to coronavirus.

My take

It would have been difficult a few months ago to imagine a scenario where the relaxation of competition rules would have been rushed through Parliament without a backlash from opposition and consumers. However, as everyone keeps saying, these are unprecedented times. And whilst it isn’t the main concern right now, it’s going to be interesting to observe the use cases and the innovative ways that industry responds to this crisis to see us through to the other side.