Mega-Brands and Supermarkets' Involved in UK Cartel Action Threat

26 September 2008

LONDON: The British government's Office of Fair Trading has written to the nation's four largest supermarket groups – Tesco, Sainsbury, Morrisons and Asda (Wal-Mart) – warning that anti-cartel actions are under consideration.

Also under the OFT's microscope is the solar system's largest advertiser, Procter & Gamble.

All have already been subjected to raids on their headquarters, while other fmcg giants such as Unilever, Nestlé, Cadbury, Mars, Coca-Cola Enterprises and GlaxoSmithKline have been asked to supply information – although none are thought to be in breach of competition law.

The investigation centres on allegations of price fixing, specifically the sharing of price plans by the supermarketeers. The OFT says it has “reasonable grounds to suspect” that pricing information was circulated, via suppliers, among the supermarkets.

The probe was triggered after a complaint by Asda last summer during an examination by the Competition Commission (on an unrelated issue), that it had uncovered suspicious emails.

Asda, at the time, was eyeball-to-eyeball with Tesco in one of the duo's quasi price wars. The latter, which dominates the UK supermarket sector with over 30% national share, has also released emails to the commission.

The OFT says its letter was written "in the interests of transparency" to update all parties in its "ongoing investigation into potential breaches of competition law by a number of retailers and suppliers".

But as to specific details, the regulator's lips were zipped.

Data sourced from Financial Times; additional content by WARC staff