By Simon Wragg

COMPETITION between supermarkets could see just six big retail groups dominate the EU grocery trade by 2010.

Aggressive sales of key products such as meat will be used to improve market share, warns a new study.

The report, by Meat and Livestock Commission analyst Maria Heaney, says the EU grocery market is the biggest in the world worth 396 billion.

But despite its size, it is still driven by tight margins and farmers cannot expect to see any relaxation in the drive to manage their prices.

The growth in supermarket sales continues apace, particularly in the meat sector where the big stores now account for 72% of purchases.

Independent butchers now have less than 17%.

Miss Heaney says this is in line with the trend towards one-stop shopping and the often aggressive marketing of fresh meat and poultry to build market share.

The volume of prime cuts being sold is also falling as more consumers adopt processed and ready meal formats.

For the UK, the retail value of processed meat products is likely to increase by 10% between 1998 and 2001, but livestock values will not necessarily benefit.

The report, in the latest Meat Demand Trends, shows that the UK is clearly among the leaders of change.

Wal-Marts tie-up with Asda last year formed the second largest alliance in the EU (valued at 32bn), just behind the French-based Carrefour Group.

Wal-Marts presence is predicted to force further alliances within the sector, leading to even stronger retail competition.