Supermarkets told how to compete

22 February 2000

Supermarkets told how to compete

THE Competition Commission is expected to issue letters outlining plans boost competition between Britains big five supermarkets on Tuesday (22 February).

The move follows a letter from the commission which said there was evidence of two complex monopolies in the food retail market, reports the Financial Times.

Farmers have long claimed that supermarkets use their massive buying power to force down the price they pay producers for livestock and vegetables.

The commission has found little evidence of excessive profits, but has highlighted areas it wants to examine further before issuing a final report.

It is reported that letters will be sent to Tesco, Sainsbury, Safeway, Morrisons and Asda.

The letters are expected to outline proposals to tackle price competition, competition for services and sites, relationships with suppliers and whether local monopolies exist.

Coinciding with scrutiny from the Competition Commission, supermarket giants Tesco and Asda have announced price cutting campaigns.

But shoppers should treat with caution the claims by major supermarket chains Tesco and Asda, warn several newspapers.

The Times says both stores have admitted that the campaign is “a new spin put on existing spending plans”.

But The Times commentary says the cuts are not completely phoney, and chains which lack the muscle of the big stores will come under extreme pressure.

  • The Financial Times 22/02/2000 page 4
  • The Daily Telegraph 22/02/2000 page 4
  • The Times 22/02/2000 page 28, 29

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