The Competition Commission will look into supply chain issues as part of its investigation into the supply of groceries by retailers in the UK.

The commission has published an issues statement which identifies clearly for all interested parties the specific questions and areas the inquiry intends to examine.

Peter Freeman, Inquiry Chairman said:” We have chosen to publish this issues statement earlier than is our usual practice so as to help those taking part in this investigation to see our approach and get a clear idea of the issues we think need examining.

“It also shows that we mean to carry out this investigation quickly as well as comprehensively. We are well aware of the burden and uncertainty caused by an inquiry like this, so we are sure that all parties will be as keen as us on a swift conclusion—we trust we can rely on their cooperation to achieve this.”

The investigation will consider whether the behaviour of grocery retailers towards their suppliers threatens the economic viability of suppliers or wholesalers (and thus the competitiveness and diversity of the supply chain) in a way which would not arise in an effectively functioning market.

It will also look at what impact the supermarket code of practice has had on relations between grocery retailers and their suppliers.

The announcement is likely to be welcomed by the farming industry and DEFRA, who have pushed for the inquiry to cover supply chain issues.

Junior DEFRA minister Lord Rooker wrote to the commission earlier this month, pointing out that the government is concerned about the impact that a reduction in the supply base might have on the rural economy.

NFU Scotland president John Kinnaird said: “I am extremely pleased that supermarkets’ treatment of suppliers and its affects on consumers is now at the heart of this inquiry. This is a massive consumer issue.  

“In a properly functioning market, there should be rewards and incentives for those producing and supplying quality food and drink that is in demand from consumers. Looking at farms across all sectors of the industry and processors in the middle of the supply chain, that is clearly not happening.”