A ROW over claims that a supermarket chain is trying to monopolise trading in Northumberland towns and villages is being raised with national competition watchdogs.
The Co-op has come under fire after buying up and closing small supermarkets in Belford, Rothbury, Seahouses and Wooler – then ensuring the vacant premises cannot be re-opened as competition to its own local stores.
Earlier this year the Co-op bought the Spar supermarket in Rothbury, later shutting it down and moving the 11 staff to its own store in the village.
Similar incidents have also happened in Belford, Seahouses and Wooler, with the Co-op putting up the vacant premises to let, but only on condition that they must not compete with its own local store.
Now Independent Belford councillor Geoff O’Connell – with the support of Berwick Lib Dem MP Alan Beith – is challenging the Co-op over what he described as its ‘apparent creation of monopoly and unfair trading practices’ in his village and other communities.
He has written to the Office of Fair Trading and the Competition Commission in London, asking them for a response.
Yesterday Coun O’Connell said he was alarmed to discover that, after acquiring and closing Belford’s Spar store a year ago, the Co-op had placed a 10-year restrictive covenant on the High Street premises.
“Research has shown that this covenant has the clear intention of preventing any activity in the old shop which the Co-op deems would be in competition with their own shop in the village. What seems to make the situation even more sinister is that the Co-op does not even own the former Spar premises, yet it has endeavoured to place a dead hand on its future use.”
He said it was clear that where the Co-op has achieved a monopoly trading position, prices in its local store have gone up. “I believe this to be is grossly unfair and I am pressing the OFT and the Competition Commission for a rapid response. I am a member of the Co-op, as were my parents and grandparents, and I find that its trumpet calls about Fairtrade sit uneasily with the position I have found on the ground.”
Mr Beith said: “I am very concerned at the way the Co-op in the North-East appears to be driving out competition, which is contrary to the principles of the Co-op movement and is creating a monopoly in many communities.” Similar concerns have been voiced in Rothbury, where locals have claimed the Co-op takeover will remove competition and push prices up. Last night a Co-op Group spokeswoman said: “We can assure our customers that we have not changed our price levels, as Coun O’Connell asserts.
“The Co-operative Group was approached to buy the independent stores in Belford, Seahouses and Rothbury because they were trading badly and likely to close. We were delighted to secure the jobs of the staff.
“Furthermore, there is nothing to stop any other retailer opening in the towns and villages quoted and, indeed, two retailers have opened in Seahouses since we acquired the Londis store last year.”
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Normal industry practice – Co-op
CO-OP bosses say the recent acquisition deals in Northumberland are standard retail practice – but admit that discussions on the issue are taking place with the Competition Commission.
A Co-op spokeswoman said: “The buildings in Belford, Rothbury and Seahouses, where the Spar and Londis stores operated, have restrictions in place that they cannot be used as supermarkets, convenience stores or off-licences, but this is normal industry practice.
“We are in talks with the Competition Commission on this issue and will abide by any decision it takes.”
The restrictions cover any new tenants of the premises involved. The Co-op has said people in Rothbury will benefit from a £100,000 investment in its store in the village, where the 11 former Spar employees now work.
The spokeswoman said: “The restrictive covenants were a matter of agreement in the business transaction. They are legitimate and normal industry practice, and protect our investments.”