OFT to study claim of supermarket collusion

THE OFFICE of Fair Trading will this week consider claims that the Sainsbury, Safeway and Tesco supermarket chains colluded on a secret report to head off criticism of their food prices. But as concern grew that Britain's leading supermarkets are acting against free competition, the OFT said it did not expect its inquiries to lead to a referral to the Monopolies and Mergers Commission.

The three supermarkets are alleged to have commissioned a secret study into how to defend themselves against the likelihood of an MMC investigation into their profits and prices.

Supermarkets' profits have continued to rise despite the recession - up almost 17 per cent at Sainsbury to pounds 732m and 6.5 per cent at Tesco to pounds 580m - and margins can be as high as 8 per cent, far higher than in the US or mainland Europe.

David Malpas, Tesco's managing director, is reported as playing down the study while the other supermarkets questioned its existence. An OFT spokesman said last night that it was not unduly concerned about three retailers commissioning a report, but is expected to contact them for details. What worries other groups is that supermarkets always denied they worked together on such issues.

Last year the OFT rejected claims by Aldi, the discounter, that supermarkets were intimidating its suppliers. Now there are new claims by American-style food warehouse clubs that big-name supermarkets are trying to freeze them out.

Great Universal Stores tightened its stranglehold on the home shopping market last year, taking market share from Littlewoods, Freemans and Empire, a report by Verdict, the research group, says today. GUS's market lead rose 1 per cent to 37.3 per cent, ahead of Littlewoods, down to 22.1 per cent from 22.9 per cent.