Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Monsanto Co. -- Ignore unavailable to you. Want to Upgrade?

To: Professor Dotcomm who wrote (1910)	4/8/1999 5:53:00 PM
From: Dan Spillane	Read Replies (1) \| Respond to of 2539

(UK) Thursday, April 8, 1999 Supermarkets face competition probe (from the full story, below) "The decision follows an eight month investigation by the OFT into claims that the supermarkets have been abusing their dominant position to squeeze suppliers while keeping prices high." (My comment: The plot thickens. These are some of the same UK names which were recently part of strange sequence of "GM food scare" happenings in the UK. Among other things, some stores helped convince consumers to buy "own brand" labels, which they said would have no GM ingredients in them...and naturally, they could jack up the price on.) (full story) Are shoppers being shortchanged? Supermarkets in the UK are to be investigated by a powerful watchdog amid allegations that some chains are ripping off consumers. The Office of Fair Trading has confirmed that it is referring the supermarket industry to the Competition Commission. John Bridgeman of the OFT: We have concerns that prices are set to match, not undercut, each other The commission, formerly known as the Monopolies and Mergers Commission, is being asked to investigate whether the big supermarkets have a monopoly that operates against the public interest. The OFT says it is not satisfied that they compete sufficiently on price. British shoppers may be paying up to 40% more for everyday products in comparison with their European and American counterparts, according to recent shopping basket surveys. The supermarkets maintain they offer value for money Probes conducted in stores around the world show that a selection of basic items such as bread, butter, milk and cheese costs 36% more in Britain than in France and 45% more than in America. The gross profits of the major UK multiples remain healthy as a result, with the Big Four - Tesco, Sainsbury, Asda and Safeway - accumulating sales of £45.55bn last year. Exploiting size The decision follows an eight month investigation by the OFT into claims that the supermarkets have been abusing their dominant position to squeeze suppliers while keeping prices high. OFT Director General John Bridgeman said: "After analysing the profits of the four largest supermarket chains, using a range of conventional and specialist economic measures, I have to conclude that there is a level of profitability here which requires further investigation by the Competition Commission. "The commission will be able to carry out a wide-ranging and transparent study of this important industry." Supermarket reaction The Consumers' Association welcomed the announcement. A spokesman said: "Consumer and competition issues in the supermarket sector are extremely complex and there is an urgent need for an informed public debate. "There does appear to be growing evidence that the supermarkets have been using their market power to reduce their costs and have not always been passing these savings on to the consumer." 'Value for money' The supermarkets vehemently deny such accusations, saying the retail food market is one of the most competitive in business, as shown by the spate of recent price cuts. They argue that profits are passed on to consumers, and initiatives such as sourcing designer goods from "grey market" unauthorised sources have saved their shoppers money. British shoppers pay more than their American and European counterparts However, they may find it harder to justify the policy of regional pricing. Major chains, including Tesco and Sainsbury - who produced total pre-tax profits of more than £1.5bn between them last year - charge varying prices for the same goods in different areas of Britain. It is thought that where major retailers face no competition from rivals, consumers could be paying up to 90% more for basic goods. Asda is the only major multiple retailer that operates a national price policy, guaranteeing prices are kept the same across the country. A spokesman for Safeway said: "Today's announcement is no surprise. We welcome the opportunity to clear the air and are confident that we will get a good result." In a letter to the OFT, Sainsbury Chief Executive Dino Adriano accused the director general's work of being "inadequate, inconclusive and insufficient". The Commission has 12 months to complete its inquiry. It will then deliver a report to the Secretary of State for Trade and Industry who will decide if any action needs to be taken. news.bbc.co.uk