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UK food retailers urge government to relax trading regulations

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Via Yahoo Finance

The government is relaxing competition regulations to allow retailers to work together more closely to help feed the UK during the coronavirus outbreak.

Supermarkets will be allowed to cooperate to keep shops open, to share distribution depots and delivery vans and to share data with each other on stock levels under the temporary waiver approved on Thursday evening. The move will also allow retailers to share staff to help meet demand.

The government is also temporarily lifting the plastic bag tax for online deliveries, to help retailers deliver groceries to those self-isolating at home without cross-contamination from delivery crates.

Environment secretary George Eustice, who approved the change in the rules after more than a week of discussions with retailers, 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.

The latest relaxation in rules came after Defra said it would work with local authorities to extend the hours that deliveries can be made to food stores to help keep supplies on the shelves. In many built-up areas, heavy vehicles cannot normally operate during antisocial hours such as late at night or early in the morning.

This week, the Department for Transport has also agreed to ease restrictions on delivery drivers’ working hours during the crisis. Drivers can now work for 11 hours in one stint, up from nine, and can work up to 96 hours in a fortnight, up from 90. Daily rest limits have also been reduced from 11 hours to nine. The new rules will come into effect on Friday.

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The big grocers, however, are calling for the suspension of some competition rules so supermarkets can work together on securing the supply and distribution of essentials.

Related: UK supermarkets take steps to prevent panic buying and shortages

Eustice has the power to temporarily exclude the Competition Act prohibition on “agreements between businesses that prevent, restrict or distort competition” for a limited period.

In the past, such orders have been made in relation to the defence industry, such as the maintenance and repair of warships in 2006, and the supply of oil and petroleum products during the 2012 fuel crisis.

Retailers are also asking for:

  • Relaxation of restrictions on the weight of goods that delivery vans can carry. Retailers say vans can safely take more weight than the current regulations allow. Raising the limit would allow vans to process more home deliveries in one go to cope with increased demand from those self-isolating, sick or avoiding the shops.

  • Easing grocery code regulations. The code was developed to prevent big grocers abusing their power over suppliers. They cannot, for instance, halt orders without reasonable warning. The supermarkets say they need the ability to make changes quickly so they can switch away from more obscure products to focus on essentials. Under current rules, they say, that could result in a fine worth up to 1% of UK turnover. Industry regulator the Groceries Code Adjudicator is expected to take a “pragmatic approach” to what counts as reasonable notice during the crisis rather than alter the rules.

  • Easing national minimum wage regulations. Morrisons said its plan to let shop workers take time out now with full pay to care for family who are taken ill, and then make up those hours later, might fall foul of minimum wage rules.

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