Supermarket probe 'uncovered price sharing'

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The Independent Online

An investigation into the UK's biggest supermarkets and consumer goods firms has uncovered evidence of companies sharing pricing information following a series of raids in April, it was reported today.

The Office of Fair Trading has told the UK's four biggest supermarkets - Tesco, Sainsbury, Asda and Morrisons - it had "reasonable grounds to suspect" pricing information was being passed between the firms by suppliers, the Financial Times said.

The watchdog also raided consumer goods giant Procter & Gamble and asked for information from other firms including Nestle and Unilever five months ago.

None of the companies has been accused of legal breaches and the watchdog refused to comment on the contents of its letter, sent last week.

It said: "The OFT is conducting an ongoing investigation into potential breaches of competition law by a number of retailers and suppliers, across a range of product areas.

"In the interests of transparency, the OFT has written to all the parties providing an update on the investigation."

The watchdog will tread carefully in its latest inquiry after it made "serious errors" in levelling incorrect allegations against Morrisons - and was forced to pay £100,000 in damages earlier this year.

But it said following April's raids that it did not embark on such investigations "without having met certain statutory thresholds and having had a rigorous internal review".

The inquiry - said to cover the pricing of products ranging from PG Tips to Aquafresh toothpaste - was prompted after Asda approached the OFT.

If found guilty of competition law breaches, companies can be fined up to 10 per cent of their turnover.

In July six retailers and tobacco firms agreed to pay combined fines of £132.3m after admitting unlawful cigarette pricing practices.

The OFT said the firms - Asda, Somerfield, First Quench, Gallaher, One Stop Stores (formerly T&S Stores), and TM Retail - had applied for leniency from the watchdog.