Further delay to OFT supermarkets inquiry

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The Independent Online
THE OFFICE of Fair Trading investigation into alleged profiteering by major supermarkets has been delayed again and is unlikely to be completed until the middle of next year.

This is the second time the report's publication has been put back. The initial report was first planned for December, but it became clear some weeks ago that the initial findings would not be completed until January or February. Now it appears the report will not surface until June or July.

The delay is the latest in a series of problems that have dogged the investigation, which was launched with great fanfare in July. The supermarkets have been concerned about the economic model used to calculate whether excessive profits are made. They have also been surprised that the OFT has asked for no information on supplier relationships - the issue that sparked the investigation after a report on the plight of the Welsh hill farmers.

"We haven't found it necessary to contact the suppliers at this point. That information will come up through the supermarkets' response to the section on profitability included in the questionnaire," the OFT said yesterday.

It is understood the OFT has so far taken the view that although consumers may pay higher prices for some items in supermarkets compared to local grocers or other shops, they are willing to pay for the convenience of buying all their groceries under one roof. This would lead the OFT to find that there is no case to answer.

However, such is the strength of the prices campaign that the OFT may to decide to broaden its inquiry or refer the issue to the Monopolies and Mergers Commission.

This would embroil the supermarkets in a lengthy process at a time when competition is intensifying. However, some supermarkets feel an MMC inquiry would reassure consumers that prices were being kept low.

A Safeway spokesman said: "We have nothing to be afraid of. If a fuller inquiry, by the OFT or MMC, is the price we have to pay for putting this issue to rest, so be it."

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