Backing for new supermarket probe

RURAL businesses have welcomed signs that the Competition Commission is turning up the heat on supermarkets by widening its investigation into how the UK's major food retailers are treating their suppliers.

RURAL businesses have welcomed signs that the Competition Commission is turning up the heat on supermarkets by widening its investigation into how the UK's major food retailers are treating their suppliers.

Tesco and Asda, the country's two biggest supermarket groups, have been ordered to hand over emails and other documentation relating to a five week period earlier this summer, with the commission believing there is evidence of buyers using threatening language to demand money from suppliers.

Despite the introduction of a Code of Conduct following previous investigations by the competition authorities, supermarkets face continued accusations that they exploit suppliers, such as by requiring them to foot the bill for cut price promotions and clearance sales.

However, suppliers are often reluctant to go on the record with the claims, fearing that they will lose business as a result of the leading supermarkets' domination of the market.


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Nicola Currie, eastern region director for the Country Land and Business Association, said yesterday: “At last it appears that commission is taking our fears seriously and is collecting evidence.

“We have been aware of allegations of bullying tactics by supermarkets for many years but, unsurprisingly, many small producers were unwilling to go public with their complaints for fear of reprisals that could put their businesses in jeopardy.”

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And she added: “Whatever the outcome of this investigation, and I hope that it will be thorough, it has to be good for the industry in the long term, and will hopefully ensure that everyone in the food chain gets their fair share of the profits in this huge market.”

An Asda spokeswoman confirmed that the company had received a request for emails and said it was co-operating, insisting that the company complied with the Code of Conduct and had “nothing to hide”.

Tesco was still more robust in its response. “It is extraordinary to see the Competition Commission putting these prejudicial allegations into the media in this way,” said a Tesco spokeswoman.

“The allegation that threatening and aggressive emails have been sent has not been mentioned to us, despite numerous conversations with the Competition Commission on this matter.”

She added that the group was confident the commission would find that its relationships with suppliers were “professional” and in compliance with the code while enabling consumers to benefit from lower prices.

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