Tesco won its key appeal against Competition Commission over competition test which had put restrictions on its growth plan. But the victory could be short-lived since the Competition Commission is bent up on bringing new proposal to restrict growth.

After release of grocery inquiry report of April 2008, the world’ 3rd largest retailer approached the Competition Appeals Tribunal against competition test that would bar retailer from gaining dominance in the local market.

Tesco’s appeal was upheld by CAT, on the grounds that Competition Commission had not taken into account adverse impact that the application of test would have on consumers. CAT specifically reasoned that if any retailer was barred from developing new store in a local area, a different retailer may not come forward with replacement.

Tesco’s executive director of corporate and legal affairs, Lucy Neville-Rolfe, reacted to the ruling saying it was great news for consumers since Tesco could bring modern retailing to people by continuing with investment in different parts of the UK including deprived areas.

She remarked that it was perverse to introduce a test that barred companies from investment in the present economic conditions.

Tesco, with 30.3% share of grocery market, would lose most from the competition test, said TNS Worldpanel. Tesco in its defence had submitted that test would bar 24% of existing big UK grocery stores from extending their outlets.

The Commission’s spokesperson pointed out that rationale for a competition test to tackle supermarkets monopolies was not challenged by the judgement.