Supermarkets to face OFT profits probe - Farmers Weekly

Subscribe and save

Farmers Weekly from £133
Saving £46
In print AND tablet

SUBSCRIBE NOW

sub_ad_img

Supermarkets to face OFT profits probe

30 July 1998
Supermarkets to face OFT profits probe

THE Office of Fair Trading – the consumer watchdog – is to investigate the profitability of Britains major supermarkets following concerns that shoppers are being ripped off. …more…

    Read more on:
  • News

Supermarkets to face OFT profits probe

30 July 1998
Supermarkets to face OFT profits probe

By FWi staff

THE Office of Fair Trading – the consumer watchdog – 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. It will determine whether the supermarket monopoly wields too much power over the grocery market.

But livestock producers – who claim farmgate prices are disproportionate to retail prices – can also take heart from the announcement, with the OFT stating that meat and dairy products would also be looked into.

John Bridgeman, director general of fair trading, said concerns about the power of supermarkets was something of 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, Sainsbury, Asda and Safeway.

“My inquiry will focus on whether competition between the majors has been distorted to the detriment of consumers. If this has happened, it is likely that the result will be increased profitability of the supermarkets in the area where their market power is concentrated, namely grocery retailing,” he added.

A National Farmers Union spokeswoman welcomed the investigation, saying its members have 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.

    Read more on:
  • News
blog comments powered by Disqus