Supermarkets make Christmas killings

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The Independent Online
IT WOULD be difficult to find a clearer example of the failure of competition policy ("In search of the competition", Business, 4 December) than the price war between food retailers. Having fought themselves to a standstill (with many innocent cas ualties) on milk and bread, the latest battleground is turkeys. Gateway announced prices for frozen birds at 35p a pound. Safeway trumped that with the self-basting version at 34p. Kwik Save have beaten them both with their 28p a pound fowl. These prices make turkey cheaper than dog meat - and are less than half what the retailers pay the producers.

The question our competition authorities must answer is whether these prices are a legitimate ploy to pull in punters, or whether they are a cynical example of predatory pricing. Needless to say, given the confusion at the Office of Fair Trading, it has said nothing. Meanwhile the high street butcher and specialist producer are being bankrupted because they lack financial muscle to cross-subsidise important seasonal lines from sales on other goods.

Though it's too late for many businesses, the Department for Trade and Industry cannot continue to ignore such ruthless predation of the strong on the weak. But specialist producers and retailers shouldn't hold their breath: so confident of official inertia have the retail giants become that Tesco now advertises on television that it takes a loss on each sale of many lines.

In many countries this would be strictly illegal. As your article implies, there is mounting evidence that Michael Heseltine's boast about intervening before breakfast, lunch and dinner was empty rhetoric. If he lets the turkey wars run their course, we'll know for sure.

Hugh Raven and Tim Lang The Sustainable Agriculture Food and Environment Alliance London SW1

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