Select Committee on Environment, Food and Rural Affairs Fifteenth Report


2  THE SAPHIR REPORT AND RESPONSES TO IT

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".[14] 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".[15]

16. The Saphir Report was broadly welcomed by the key stakeholders. The Corporation of London described it as "a very useful report".[16] The Chairman of the CGMA issued a statement welcoming it.[17] Similarly, Wandsworth Borough Council said it was "thorough in its analysis",[18] and the Fresh Produce Consortium described it as an "excellent report".[19] We 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 on each.

Saphir recommendation
Covent Garden Market Authority
Corporation of London
Recommendation 1:
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]
Recommendation 2:
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]
Recommendation 3:
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 markets".[20] Since 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".[21]

19. The Government published its response to the Saphir Report in the form of a Written Ministerial Statement on 20 June 2003.[22] 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 this process".
  • 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

15   p 56 Back

16   Q1 Back

17   Ev 9, para. 3 Back

18   Wandsworth Borough Council response to the Review of London Markets Back

19   Fresh Produce Consortium response to the Review of London Markets Back

20   Q 67 Back

21   Q 77 Back

22   HC Deb 20 June 2003 cc 25-27WS Back


 
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