The UK government announced plans on 19 March 2020 to let supermarkets share stock information, distribution facilities and staff as they responded to coronavirus disruption. But the competition regulator drew a limit the same day: cooperation needed to protect consumers would not invite its enforcement action; unnecessary exchanges about longer-term prices or business strategy would. The government said legislation for its temporary exemption would be laid shortly. [S1][S2]
The operating changes described by ministers reached across the grocery supply chain. Retailers could share information about stock levels, use one another’s distribution depots and delivery vans, cooperate to keep shops open and pool staff. For a distribution manager, the practical opportunity was to coordinate available goods and the people and vehicles needed to move them across company boundaries. That is an implication of the announced measures, not evidence that any particular supermarket had already shared a depot or transferred employees. [S1]
The legal exemption and the enforcement assurance were different offers. Ministers proposed a specific, temporary relaxation of the Competition Act 1998 for the purpose of feeding the nation. Separately, the Competition and Markets Authority (CMA) addressed agreements outside that legal relaxation. It said it did not intend to take competition-law enforcement action against cooperation or product rationing to the extent necessary to protect consumers, giving security of supply as an example. An announced legal change and a regulator’s enforcement position were therefore not interchangeable. [S1][S2]
The CMA’s warning gave retailers a concrete boundary for those conversations. It would not tolerate the crisis being used to conceal non-essential collusion, including exchanges about longer-term pricing or business strategies when unnecessary to meet the immediate situation. Read alongside the stock-sharing announcement, that leaves an important distinction: coordinating a shortage does not itself justify opening a discussion about future commercial plans. The test described by the CMA was necessity for protecting consumers, not simply whether the businesses were operating during the crisis. [S1][S2]
There was also a separate risk for businesses relying on the regulator’s assurance. The CMA expressly said its position could not protect them against competition litigation brought by private parties. Its statement explained how it intended to enforce the law; it did not promise immunity from a claim by someone else. [S2]
Source documents
- Supermarkets to join forces to feed the nationhttps://www.gov.uk/government/news/supermarkets-to-join-forces-to-feed-the-nation
- COVID-19: CMA approach to essential business cooperationhttps://www.gov.uk/government/news/covid-19-cma-approach-to-essential-business-cooperation