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Watchdog seeks Tesco, Asda emails
LONDON (Reuters) - The Competition Commission has asked supermarkets Tesco and Asda to hand over millions of emails as it investigates whether they are exerting undue pressure on suppliers.
The commission said on Sunday it had sent out legal notices to two supermarkets demanding confidential information. Both Asda and Tesco said they had been approached and were providing emails sent to suppliers this summer.
The watchdog has been investigating Britain's 125 billion pound grocery market since March 2006 after complaints about their rapid expansion, predatory pricing, their relationships with suppliers, and their entry into the convenience sector.
"The Commission is looking at how the bigger retailers are treating their suppliers," a source close to the inquiry said of the demand for emails. "There's been a couple of interesting emails brought to the Commission's attention."
A spokesman for Asda said the firm would help the Commission with its request for emails from this summer, adding that it might have to sift through 11 million of them.
A spokesman for Tesco said the group had nothing to hide.
"We are doing what we can to assist the Commission with this enormous data request," he said. "We expect the Commission to conclude that at Tesco relationships with suppliers are professional and act to the ultimate benefit of the customer."
The Competition Commission said in January there were few signs that grocery suppliers profits were being squeezed by the supermarket giants.
It also signalled that predatory pricing by the largest grocery retailers could be acceptable if it benefited the consumer, even though the practice could unintentionally drive smaller players out of business.
Yet it cautioned the investigation was ongoing and that it would not tolerate any company's abuse of its dominant position.
It also said that the picture might not be complete, because a "climate of fear" was hampering its inquiry and suppliers were not willing to provide evidence for fear of retaliation by supermarkets.
Final conclusions from the agency, which has wide powers to act, short of issuing fines and changing the law, is expected by the end of 2007.
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