Essays on Supermarkets Code of Conduct and the Enterprise Act 2002 Case Study

Download full paperFile format: .doc, available for editing

The paper "Supermarkets Code of Conduct and the Enterprise Act 2002" is a good example of a law case study.   Regulation is a means of achieving defined goals by the use of rules aimed at shaping conduct or controlling behavior is businesses. This, therefore, means that they entail objectives which are the reason behind intervening in the market places (Baldwin, Cave & Lodge, 2012). This is the reason why there are regulations which govern the market playfield in the UK. For instance, where there are inadequate competitions, where suppliers, collate and dominate the market or even make arrangements which reduce competition and customer choice, regulations intervene to bring sanity in the market (Pryor, 2002). Regulations also intervene where there are fraudulent, deception and oppressive marketing practices or in other words where businesses take advantage of consumers in ways that are illegal or even unfair (Pryor, 2002).

This, therefore, entails that National Consumer Council lays its main concern in the issues related to consumers which is the broad social policy objective. This being the case, there is a need for regulations which protect the health and safety of workers which may otherwise cost the consumers (Baldwin, Cave & Lodge, 2012). In the years 2002 and 2003, there are supermarkets that were charged for price-fixing of some products in the market.

In this case, there was a regulation that was brought in the scene in regard to this act, which had a relation with the Competition Act 2002, the Supermarkets code of conduct and the Enterprise Act 2002 Office of Fair Trading (OFT) was involved in investigations that were carried out to unearth the saga behind the retail pricing of daily products by the supermarkets and daily products.

After investigations, it was clear that there was a breach of the Competition Act 1998 by colluding, through exchanging vital and very confidential information to fix the prices of daily products. This collaboration succeeded for supermarkets exchanged retail prices directly with each other through the daily processor, through the hub and spoke information exchanges (Stewart, 2004) It is worth noting that, the UK Competition Act 1998 prohibits anti-competitive agreements between businesses that prevent, restrict or distort competition in the UK.

(Pryor, 2002). . This includes price-fixing or limit production. However, the most serious of the anti-competitive agreement is a cartel, where businesses come into a consensus not to compete with each other. The office of Fair Trade states that the competition encourages businesses to give better products to customers, while anti-competitive agreements increase the price and this harms the customer’ s choice (Curran & Hollander, 2001) This, therefore, calls for intervention so as to stop businesses from colluding so as to have a choice for customers and to the businesses, competitive prices. Competition policy is never for businesses that collaborate especially where the market is oligopolistic or in other words the food sector (Pryor, 2002).

Having too much economic power in a few firms like it is the case of supermarkets exaggerates their actions on the market. This, therefore, means that even if three or four of them are to make an agreement, the impact is going to be severe and felt by many customers (Cadot & Grether, 2000). Government’ s regulation regulations revolved around principles which qualify them to fall in the class of being good regulation.

(Baldwin, Cave & Lodge, 2012). One, they have to be transparent which means that they must be open, simple and user friendly. Secondly, the have to have accountability which is to the authorities users and to the entire public, then they should focus on the problem so as to minimize side effects (Cadot & Grether, 2000). They should also be consistent which means that they have to be predictable and finally they should be proportional in that, they should fit the remedy to the risk, and only regulate when needed to do so.

A regulation which poses these principles are good regulations (Stevens, 2010)

Bibliography

Andrew Alexander and Simon Phillips, 2006 '"Fair play for the small man": perspectives on the contribution of the independent shopkeeper, 1930-c.1945,' Business History, vol.48, pp. 69-89.

Baldwin, R., Cave M., & Lodge, M., 2012. Understanding Regulation. 2nd Edition Oxford: Oxford University Press. Pp. 15 – 164

Burt, S.L. and L. Sparks (2003) ‘Power and competition in the UK grocery market’, British Journal of Management, 14 (3), 237–254.

Barling, Lang,& Rayner,2008 ‘Sustainable Food Systems in Europe: Policies, Realities and Futures’, Journal of Hunger & Environmental Nutrition, Vol 3, Iss 2&3, Pp. 145-168.

Curran & Hollander 2001 ‘The Greening of the Grey: National Competition Policy and the Environment’, Australian Journal of Public Administration, 60 (3), Pp. 42-55, September

Cadot, O., J.-M. Grether (2000). "Trade and Competition Policy. Where Do We Stand?" Journaof World Trade 34(3): 1-20.

Lang, T.,2003 ‘Supermarket Power! Current tensions between competition policy and food policy’, Agri-food Network Seminar, pp. 13

Lee, R., 2011. Regulation and Localism Environmental Law and Management 23(4) pp. 166 170.

Pryor, F. L. (2002) Quantitative notes on the extent of governmental regulations in various OECD nations, International Journal of Industrial Organization, 20: 693-714.

Smith, H. (2004) “Supermarket Choice and Supermarket Competition in Market Equilibrium” Review of Economic Studies, 71, 235-263.

Stewart, T. (2004). "Is Flexibility Needed When Designing Competition Law for Small Open Economies? A View from the Caribbean." Journal of World Trade 38(4): 725-750

Stevens, C.,2010 ‘Linking Sustainable Consumption and Production: The government role’, Natural Resources Forum Special Issue: Sustainable consumption and production, Vol 34, Iss 1, Pp. 16-23,

The Cooperation Incubator,2010 ‘Corporate Responsibility, Voluntary Agreements and Competition Law. A ‘How-to’ Guide’, pp. 33

Download full paperFile format: .doc, available for editing
Contact Us