2 THE SAPHIR REPORT AND RESPONSES
14. Nicholas Saphir published his Review of London
Wholesale Markets in November 2002. He suggested that the markets
were increasingly dependent on supplying small catering establishments,
the relatively small number of remaining independent retailers
and street markets. As such, they perform an "important,
but reduced function in the distribution of perishable foods".
Although peripheral to the main supply chain, the markets, if
well managed, could play a major role in reducing traffic congestion
by improving the distribution of food to central London's catering
establishments. In order to service the catering trade effectively,
markets needed to consolidate and supply a range of food produce
from the same site.
15. The Review also considered the effect of the
current legislative framework on London's wholesale markets. Mr
Saphir noted that over centuries, Royal Charters, legislation
and regulations have placed restrictions on how markets operate
and what products can be sold within them. He argued that the
current prohibitions "protect some wholesalers' profits at
the expense of the future prosperity of markets, customers and
society in general".
16. The Saphir Report was broadly welcomed by the
key stakeholders. The Corporation of London described it as "a
very useful report".
The Chairman of the CGMA issued a statement welcoming it.
Similarly, Wandsworth Borough Council said it was "thorough
in its analysis",
and the Fresh Produce Consortium described it as an "excellent
welcome the decision of the Government and the Corporation of
London to commission a review of London Markets in line with the
recommendation made by the Agriculture Committee in 2001. We also
welcome Mr Saphir's Report and the clear conclusions that it draws
on the way that a secure future for London's wholesale markets
can be achieved.
17. Although there is a broad consensus on parts
of Mr Saphir's analysis, there is significant disagreement between
the two main controllers of London's markets, the CGMA and the
Corporation of London, on the recommendations in the Report. The
table below sets out the three main recommendations of the Saphir
Report and the positions of the CGMA and the Corporation of London
||Covent Garden Market Authority
||Corporation of London
markets need to operate from a limited number of composite sites.
|Agrees. In a statement on the publication of the Saphir Report, the Chairman of the CGMA said that there was "an overwhelming logic" to meat, fish, and fruit and vegetables being distributed from the same site.
||Agrees. The Corporation of London told us that "it could see the benefit of composite sites". [Q1]
the legislation that applies to wholesale markets restrains trade and "should be removed to allow competitive dynamics to produce a more effective supply chain".
|Agrees. The CGMA said "we agree particularly that the medieval common law of 6? miles market franchise areas and Edward III's charter of 1327 are not really apposite to wholesale markets in the 21st century".
||The Corporation of London described this recommendation to us as "more difficult and somewhat controversial" [Q1]. It has indicated its intention to mount a legal challenge to diversification at New Covent Garden Market. In his observations on the Review, the Town Clerk suggests that the laws "prohibiting the creation of a new market within 6? miles of an existing market have stood the test of time". [Report of Town Clerk, 17 February 2003, para.10]
London should be serviced by three composite markets for meat, fish, fruit and vegetables based at the sites of Nine Elms, Spitalfields and Western International.
|Agrees. ||Disagrees. The Corporation does not believe that "the creation of composite sites at Nine Elms and Spitalfields is desirable or financially viable" [Report of Town Clerk, 17 February 2003, para.11]. It proposes as an alternative that it take over ownership of New Covent Garden and develop 'non-wholesale' activities. It envisages New Covent Garden Market as a "complementary facility providing specialist 'value-added' services for the catering and restaurant trade of Central London". [Q1] This would "complement
a composite wholesale market at Spitalfields". [Report of Town Clerk, 17 February 2003, para. 15d]
18. The CGMA has rejected a proposal from the Corporation of London
to take over New Covent Garden Market and develop it as a non-wholesale
market providing specialist services to the catering trade. In
his evidence to the Committee, the Chairman of CGMA accused the
Corporation of "deliberately trying to stifle the development
and expansion of New Covent Garden Market to protect their own
rejecting the Corporation of London's proposal, the CGMA has started
discussions with property development companies as potential sources
of external finance. These discussions have included the possibility
of such companies "developing parts of the site that are
not needed for market purposes and possibly developing those for
their own purposes".
19. The Government published its response to the Saphir Report
in the form of a Written Ministerial Statement on 20 June 2003.
In this, it noted from the response to the consultation on the
Saphir recommendations and discussions with the various parties,
that "there is no consensus on a single way forward".
On the specific recommendations in the report, the Government
reached the following conclusions.
- While sympathetic to the view that some of the current legislation
which governs markets should be amended or repealed, it has "no
proposals at present to amend the legislation governing markets
generally or to promote amendments to the legislation governing
specific London markets".
- It is for the market owners to plan for the future
of each market in consultation with the relevant local authorities,
the Greater London Authority (GLA) and the London Development
Agency. The Government would play a part "as consultees in
- The statement reiterates the Government's policy
to "disengage" from New Covent Garden Market in a way
which maintains it as a going concern.
- Where the legislation covering New Covent Garden
Market requires the Secretary of State to grant permission for
new forms of trading, this will generally be granted. It has indicated
that it is "minded" to approve any application from
the CGMA to trade in meat and fish. The statement notes that the
Corporation of London may seek to challenge the legality of any
moves made by the CGMA to trade in meat and fish at Nine Elms.
This may therefore be a matter "on which the Courts shall
be called to decide".
- The Government is ready to consider proposals
from any source for the future development of the Nine Elms site
which provide for its future use as a market. It confirms that
"proposals for the injection of private finance into the
site have been and will be welcome".
14 Review of London Wholesale Markets, para 11 Back
p 56 Back
Ev 9, para. 3 Back
Wandsworth Borough Council response to the Review of London Markets Back
Fresh Produce Consortium response to the Review of London Markets Back
Q 67 Back
Q 77 Back
HC Deb 20 June 2003 cc 25-27WS Back