Presentation on theme: "Competition law and learning from the Tuffins Case Edward Parker Secretary & Head of Governance The Midcounties Co-operative 7 November 2014."— Presentation transcript:
Competition law and learning from the Tuffins Case Edward Parker Secretary & Head of Governance The Midcounties Co-operative 7 November 2014
Tuffins “The OFT also notes the parties’ submission that the one-stop store has a wide and eclectic product offering including both food and non-food items (such as gardening products and parrots).”
Some OFT jargon Substantial lessening of competition Substantial part of the UK Turnover test Share of supply test Jurisdiction
The OFT is.... cautious “On a cautious basis the OFT considers it appropriate to.... “The OFT has also, on a cautious basis.... “The OFT’s estimates reflect an approach that is more cautious.... “The OFT considered it appropriate on a cautious basis....
The OFT needs.... evidence “As the OFT has not received compelling evidence in this case.... “In the absence of sufficient evidence to suggest.... “The OFT considered the evidence available to it.... “There was insufficient evidence to conclude....
The OFT likes.... process Stage 1 “identifying local overlap areas and conducting an initial filtering exercise” Stage 2 “estimating diversion ratios and asymmetric illustrative price rises” Stage 3 “assessment of other factors”
.... so it all gets very complicated “Please provide alternative linear and isoelastic IPR estimates using both M b and D ba estimates from the (b) store which has the highest D ba to the focal (a) store (we would expect this to be the (b) store closest to the focal store), all respondents included but excluding ‘would not have purchased the items’ responses. OFT to Midcounties “We have to consider the ‘counterfactual’ – i.e. what would have happened if what has happened hadn’t happened.... !!” Midcounties Secretary to Midcounties CEO
.... even more so because of the ‘c’ word Competition law and Co-operatives Co-operatives confuse regulators....
..... which causes contradictions Do societies compete? OFT decisions: United Yes Somerfield No Lothian & BordersYes.... and..... No
In the case of Midcounties and Tuffins.... “The OFT considers that the parties have provided evidence that the level of rivalry that exists between Midcounties and CGL is likely to be higher than at the time of the CGL/Somerfield assessment in 2008.”
What evidence? OxeraOFT Different prices, different ranges, different opening hours, different local sourcing, different formats, different cost base, different member programme, different dividend rate, different Board, different management Similar prices, similar ranges, same buying terms, same promotions, influence at CGL, influence at CRTG
Putting it all together Complex, expensive, time consuming Evidence required Disposal of 4 stores Partially effective competitors
The final word..... “The OFT clarifies that whilst there is a parrot at the Churchstoke store, the store does not sell parrots.”