Buying power abuse charges refuted by UK supermarkets
Buying power abuse charges refuted by UK supermarkets
By Alistair Driver
BRITISH supermarkets, accused this week by the Competition Commission of abusing their buying powers, have maintained they are not acting against the interests of farmers or the public.
In an interim letter to retailers involved in the ongoing supermarket monopoly inquiry, the commission says it has reached the provisional view that they belong to either or both of two complex monopolies. One regarding grocery prices and the other regarding their relationship with suppliers.
This follows 10 months of contact with retailers, suppliers and local authorities. The letter highlights key issues the commission wants to cover with five supermarkets – Tesco, Sainsburys, Asda, Safeway and Morrisons – in March before reaching its final conclusions, probably in the summer.
These include their excessive buying power and whether they prevent suppliers from earning a reasonable return. It wants to focus specifically on the terms and conditions governing access to supermarket shelves and discrimination between suppliers in further investigations.
The commission will also investigate whether price changes by suppliers have been "rapidly and fully passed through to consumers".
Figures supplied by the NFU showing the declining share of retail price paid to the farmer between 1997 and last year suggests they have not. They show the farmers share has fallen from 40% to 29% of the retail lamb price, from 31% to 29% of the beef price, from 34% to 28% of the pigmeat price, from 36% to 31% of the milk price and from 26% to 20% of the egg price.
But the big supermarkets remain unrepentant. An Asda spokeswoman said its prices had remained stable while beef and pork prices had risen in 1998 and 1999.
A spokesman for Tesco said it was doing all it could to help farmers, including passing lower supply prices to the customer. "We have always insisted farmings problems do not lie at the supermarkets door," he said.
David Bremner, Sainsburys managing director, said the provisional findings carried no implications that supermarkets were operating against the public interest.
All the leading retailers welcomed the commissions acknowledgement that supermarkets were not making excessive profits, that UK prices had fallen in real terms and that "high levels of consumer satisfaction" with supermarkets had been noted. *