14 September 1998
Supermarkets attack OFT profit probe
MAJOR British supermarkets have launched an attack on the inquiry by the Office of Fair Trading (OFT) into their profits and prices.
They say the inquiry has been muddled, slow, and is using an economic model that appears unworkable.
The department launched the inquiry after allegations were made that the supermarkets were profiteering by using their power to squeeze suppliers and not passing on savings to consumers.
A report by the Welsh Affairs committee into the crisis in Welsh farming concluded that prices charged on the supermarkets shelves for beef and lamb bore no relation to the prices paid to farmers.
The supermarkets said they were particularly concerned by the new economic model being used by the OFT to determine excess profitability. One supermarket director, quoted anonymously by The Independent, describes it as “severely econometric” – that is, heavily dependent on mathematical modelling techniques.