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Tricky recommendations

Hello bloggers, this is Poulomi Saha and I write for Ethical Corporation from Mumbai.

My post here is less a statement and more a question I’m thinking aloud and posing to readers and fellow Ethical Corp writers.

For the latest issue of the magazine, I did a story about Thai authorities under former prime minister Thaksin Shinawatra and the current military administration temporarily restricting supermarket growth due to complaints they were hurting small retailer businesses. Tesco was amongst those in the firing line.

While doing this story, I read of British prime minister hosting tea parties in London for his Indian counterpart Dr Manmohan Singh earlier this month. The occassion being mostly an Indo-UK investment summit, (India is the third largest foreign investor in the UK) there was talk of Blair doing everything in his power to convince Dr Singh into relaxing wholesale retail laws in India that currently deny foreign supermarkets access to the world’s fastest growing consumer retail markets. Tesco, fighting against the likes of Wal-Mart and Carrefour, of course stands to benefit most from such persuasion tactics.

Now, how can a prime minister promote his national corporate interests when one of his own national regulators, the Competition Commission is conducting an inquiry into alleged ‘bully behaviour’ (squeezing of suppliers, putting small retailers out of business, use of anti-competitive methods etc) by the country’s top 4 supermarkets – Tesco, Asda, Sainsbury’s and Morrisons? It is understandable when politicians ignore similar investigations in far-away countries like Thailand as matters that dont concern them and their promotional agendas. But what when such an enquiry in currently ongoing on your own grounds?

Ideally, shouldn’t Mr Blair put a moratorim on such promotion, at least by his own government-related agencies and departments, until the Competition Commission comes out with its report on the inquiry by next year-end? Of course, as well, as stopping himself!

Okay, this may be a naive question for some but then do care to enlighten me if you can! Maybe our politics editor, Peter, may have some thoughts on the strange workings of governments and politicians?!

2 Comments

  1. In answer to your question, I suppose the government would argue it is business as usual until the commission publishes its findings, the first of which are due in December.

    Although cynics would say Blair can advocate the interests of UK supermarkets all he likes because the commission’s findings do not matter very much.

    Tesco, Sainsbury and co. have been here before. In 2000, the competition commission found major supermarkets guilty of over 25 anti-competitive practices.

    Six years on, supermarkets are back in the dock – suggesting they have done little to improve terms of trade for their suppliers or stopped the below-cost selling and predatory pricing that does such damage to smaller retailers.

    What is new is how supermarkets are using corporate responsibility as a means of self-defence. All proclaim to be listening to communities where they operate and responding to consumers’ environmental concerns.

    Tesco has even set up a special website to make its case: Talking Tesco – How we compete http://www.tesco.com/talkingtesco

    But greener does not mean fairer. Supermarkets can green their supply chains but this does not mean suppliers are paid better prices or given less restrictive terms.

    Or, put another way, installing wind turbines on a superstore roof means nothing if that store’s unfair pricing is destroying local business.

    The challenge for supermarkets remains to prove that responsibility is in fact central to the way they do business.

    John Russell, deputy editor

  2. Simple. Innocent until proven guilty.

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