OFT probes motorway service areas
The Office of Fair Trading (OFT) is looking into possible anti-competitive behaviour by operators of motorway service areas in the UK.
"It's something we have been looking at for some time," said a spokesman. "We are looking at all areas of motorway services but as yet we have come to no conclusions on it."
The OFT launched its investigation last year following complaints from the public that price of food and drink was too high. If it finds evidence of possible anti-competitive practices, it has the power to refer the matter to the Competition Commission.
The commission would then produce its own report and can recommend action to the Department of Trade and Industry, which could include forcing the operators to sell some outlets.
The market is dominated by three players: Granada with 42 service stations, Welcome Break with 23, and RoadChef with 19.
The OFT spokesman said: "We've written to the parties to get information from them and we're analysing the information coming in."
Granada pointed out that food prices at its service stations reflected the massive investment needed to provide facilities such as safe access roads, free parking, clean toilets, 24-hour, year-round opening and "a high level of quality and customer service".
Independent research had shown that two thirds of people who visit Granada service areas use the free facilities but buy nothing.
"Apart from moterway service areas, no other food retailer in the country is legally obliged to offer this range of services and facilities on such a large scale," Granada said. Each service area needed an investment of £25m, only £5m of which went on revenue-generating areas.
It added: "We sincerely believe we offer value for money when faced with the enormous capital overheads and legal restrictions that are inherent in building a motorway service area. We constantly strive to bring down prices without sacrificing the quality of the product."
Prices of hot food had recently been cut by 30% in its self-service restaurants as a result of introducing new offers such as Little Chef Express.
Granada also pointed out that it was prevented from advertising on the motorway itself to attract new customers. On-site promotions only diverted customers from one outlet to another.
A RoadChef spokeswoman claimed the company was unaware of the OFT investigation. She pointed out that RoadChef was introducing high-street offers such as McDonald's and Costa Coffee to its service areas, and charging normal high-street prices for them.
by David Shrimpton david.shrimpton@rbi.co.uk
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