More supermarkets could be better for shoppers

The watchdog is expected to say not enough competition is good for the supermarkets but bad for shoppers.

In a report to be published later, the commission is set to suggest an independent body could monitor the way big supermarkets treat their suppliers.

However, it is due to say it found no systematic mistreatment of suppliers.

Previously the Office of Fair Trading (OFT) has expressed concern supermarkets were squeezing low prices out of suppliers, who were then forced to charge higher prices to smaller retailers.

Peter Kendall, president of the National Farmers Union, supported the suggestion of an independent voice that could hold retailers to account.

For me, the big story out of the Commission's report will be an attempt to give all of us a greater choice of supermarkets in our local areas Robert Peston, BBC Business Editor Read Robert Peston's blog

"We try to do it as a farmers' organisation. It's important we have a fair and balanced relationship with the retail sector."

Currently supermarkets cover more than 2,000 acres of land excluding their car parks.

However the commission, which has conducted an 18-month investigation, is expected to say that some of the big supermarkets are under-represented in parts of Britain.

BBC business editor Robert Peston said the commission is also set to look at ending the practice of "land banking" whereby retailers buy land to stop competitors opening stores nearby.

Some will argue the future of supermarkets should not only be about competition.

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Will Hutton, of the Work Foundation, said high streets which look different were more attractive to investors and as places to live.

Wednesday's report will not be final. Supermarkets will have the opportunity to respond to its findings before the Competition Commission publishes its final recommendations in March 2008.

Unlike the Competition Commission's previous report in 2000, this will not be a report into whether customers are being overcharged.

The 2000 report found that the supermarket sector was broadly competitive and recommended that a Code of Practice be drawn up to deal with the treatment of suppliers.

The Code of Practice came into force in March 2002.