7 August 1998

OFTto probe supermarkets

CONSUMER watchdog, the Office of Fair Trading, is to investigate the profitability of Britains major supermarkets following concerns that shoppers are being ripped off.

The investigation will look into the grocery trade – which covers food, drink, cleaning products, toiletries and household goods – and will determine if the supermarkets wield too much power in the market.

The news has cheered livestock producers – who claim farmgate prices are disproportionate to retail prices – with the OFT stating that meat and dairy products would also be looked at.

John Bridgeman, Director General of Fair Trading, said concerns about the power of supermarkets was a "recurrent theme" for his department.

"Over the past few months a number of concerns have been raised about the level of buyer power that the major supermarket groups are able to exercise. The report of the Welsh Affairs Committee into the crisis in Welsh farming, focusing on beef and lamb prices and the study commissioned by the Liberal Democrats are two conspicuous examples," he said.

The investigation would look, in particular, at the profitability of the four largest supermarket groups: Tesco, Sainsburys, Asda and Safeway.

An NFU spokeswoman welcomed the investigation, saying members had been concerned about the difference between farmgate and retail prices for some time.

"Its a great opportunity for people to resolve this matter once and for all. Hopefully this investigation will lead to a more transparent pricing structure across the entire food chain," she said.