Sainsbury’s vs Tesco dispute winds up in court
Legal challenge after advertising watchdog rejects complaints about Tesco’s ‘Price Promise’
Wednesday 30 October 2013
A bitter dispute between Sainsbury’s and Tesco is set to hit the courts after the UK’s second biggest supermarket said it would seek a judicial review into the advertising watchdog’s decision not to uphold a complaint against their bigger rival.
The court case is likely to cost more than £100,000 and is the first time a supermarket has taken the Advertising Standards Authority to court over one of its decisions.
Tesco launched its “Price Promise” advertising campaign earlier this year, which will match the prices of own brand goods as well as branded products, but Sainsbury’s and Morrisons complained to the ASA that the comparisons were unfair and misleading.
Sainsbury’s took particular exception to the promotion, claiming their own-brand products – which now account for 50 per cent of the company’s food sales – were of higher quality than Tesco’s and therefore could not be accurately compared.
The ASA threw out Sainsbury’s initial complaint, leading to an independent review by Sir Hayden Philips, who agreed with the watchdog that the Price Promise was fair and there was no need for the investigation to be reopened. However, Sainsbury’s commercial director Mike Coupe hit back, saying it was “time to take a stand on behalf of the huge majority of customers who want to make fair comparisons when they shop”.
He rejected suggestions that the case was a vanity exercise, saying: “That is wrong. It is a point of principle. Tesco act as judge and jury on what they can and cannot compare, which isn’t right.”
He suggested there could be more than 1,000 items that are “unfairly” compared, including own-brand tea bags, where Sainsbury’s are own brand and Tesco’s are not. He also cited own-brand bottled water, with Sainsbury’s supplied by a natural spring in Yorkshire and Tesco’s from the water mains.
However, he admitted that sales were unlikely to have been affected by the Price Promise because customers were aware of Sainsbury’s strong record on provenance, ethics and price, pointing out that it was not implicated in the horsemeat scandal. By comparison, Tesco found horse DNA in its burgers and lasagne.
A spokesman for the ASA said: “We stand by our ruling and will defend our decision at judicial review.”
Tesco’s UK marketing director David Wood said: “Sainsbury’s argument against Price Promise has been heard and rejected twice already. Tesco Price Promise offers customers reassurance on the price of their whole shop, in store and online, not just the big brand products. When family budgets are under pressure, that is the kind of help customers want.”
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