Supermarket pricing should beinvestigated by OFT report

20 May 1998

‘Supermarket pricing should be
investigated by OFT’ — report

By Boyd Champness

THE retail pricing of red-meat products should be investigated by the Office of Fair Trading, according to a cross-party committee of Welsh MPs.

The Commons Welsh Affairs Committee report into the crisis facing the Welsh livestock industry argues that the OFT should step in to establish what percentage of the retail and wholesale costs are being passed back to producers by supermarkets.

While the report accepts that supermarkets are not “profiteering” out of red-meat sales, they also dont appear to be suffering, unlike the nations farmers, it said.

It said the bargaining power of farmers had progressively been weakened as retailers control of the supply chain strengthened, and that this dominance should not be used to push prices lower.

The committee called for the intervention of the OFT after its efforts to investigate the situation were thwarted by the major supermarkets. It said all the major retailers were nervous about giving information to the committee, fearing it may benefit their competitors.

“Even in private, they have provided us only with indexed data, rather than real figures. We are surprised at the difference between the margins quoted by different retailers and suspect that different accounting methods may be involved,” the report said.

“If the retailers wish to reassure a suspicious public, they must be more open with their figures,” it added.

The report also said that Welsh agriculture would be “destroyed” within 10 years unless urgent action was taken to reverse the decline in farm incomes. It said Government assistance was desperately needed to assist the “development” of the meat industry, instead of throwing money at maintaining production irrespective of demand or quality.

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