Tesco fights hard, and often it wins. One battle it appears to be losing is in Thailand, where last year’s military coup was less about corruption, as claimed by the generals, and more about the success of the British supermarket. Tesco was doing in Thailand what it does in the UK, attracting customers – and staff – to what is a compelling business. The first, and so far the only meaningful legal reform under the Thai military regime, was not a campaign against corruption, the benefits of which the soldiers enjoy quite as much as the politicians, but limit on foreign direct investment in a manner designed to squeeze out Tesco in favour of small shopkeepers.
Yesterday Tesco made its submission to the Competition Commission in relation to the inquiry into the grocery market in the UK. I have to admit I suspect there is a lot of social and political impetus to this inquiry. If Tesco is manipulating prices, or inhibiting trade in certain assets, such as land, then there is a case for an inquiry. But if other businesses are failing to keep up, or if certain sets of suppliers are falling by the wayside, or if less efficient economic models are falling into decline – that is not the business of the Competition Commission.
I have no idea whether Tesco is manipulating prices, or if its land bank is excessive and an inhibition on trade. I hope the commission will enlighten us. For other supermarkets, I have little sympathy. Fifteen years ago Sainsbury was sparkling and Tesco in the doldrums. Asda has the backing of WalMart, not exactly a shrinking violet in global retailing.
I am not much sympathetic to the suppliers, either, to be honest. The model of the 17th century enclosed farm that continues to dominate the generally mawkish debate on agriculture in England is not a product of nature. If Tesco can better source its produce in Africa, good luck to the Africans and about time they had their chance. The natural state of England is oak forest, to which our farms, if abandoned, would revert in about 20—40 years. I would personally be happy with that. Neither is the food-miles argument terribly strong – European farms are typically so hopeless that they use more carbon-based energy per item than farms abroad, including transport.
As for the equally mawkish ‘debate’ on the decline of the high street – thank you and goodbye is my response. Without full-time housewives, who have the time and skills to shop daily from strings of small shops, the high street is a redundant economic model. Supermarkets, in other words, provide a lot of the efficiencies on which a modern economy depends. I understand that towns, suburbs, villages, when they lose their high streets lose a meaningful focal point of their identity. Well re-invent them. The same argument was used about coal mines, if anyone still remembers what they were.
Tesco claims it does not have a stranglehold on the market, that ‘most shoppers’ are a 30 minute drive from over 20 grocery suppliers, including at least one of the big-five supermarkets. It doesn’t sound to me like a case for a military coup.
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