April 27, 2008 / 1:30 PM / 9 years ago

OFT raids supermarkets and suppliers

<p>A customer carries Sainsbury's bags in an undated file photo. REUTERS/Darren Staples</p>

LONDON (Reuters) - Sainsbury said on Sunday it had been visited by officials from the consumer affairs watchdog, after a report of a widespread inquiry into alleged price fixing by supermarket operators and suppliers.

The Sunday Telegraph newspaper said the Office of Fair Trading (OFT) was investigating prices of health and beauty products as well as groceries, as part of its biggest-ever probe. An OFT spokeswoman would not comment.

Sainsbury said: “We have been asked for some information regarding a number of suppliers and product categories and are helping the OFT with their enquiries. We do not have any further knowledge of the details of their concerns”.

The Sunday Telegraph said Sainsbury and the other three big supermarket chains -- Wal-Mart owned Asda, Morrisons and Tesco -- as well smaller operators and suppliers were raided by the OFT, which took copies of e-mails.

The timing will attract attention as Britain’s Competition Commission is due to publish the results of a separate two-year investigation into the grocery market by May 8.

A spokeswoman for Tesco would not comment on the report but said that in general the company absolutely denied any allegations of collusion. Asda and Morrison were not immediately available for comment.

FOOD PRICES

Food prices have been rising worldwide as more prosperous emerging economies, led by China, have the means to buy more milk, cereals and meat. Latest official data showed British food prices rose 5.5 percent in the year to March.

The OFT is working on two major investigations involving supermarkets: a long-running inquiry into milk prices and one on cigarette pricing, with the latter only made public on Friday.

The OFT has accused tobacco companies and retailers, including the big four supermarket chains, of fixing prices on cigarettes between 2000 and 2003.

It has been a busy period for the OFT.

On Thursday, the organisation won a legal victory in the first stage of a lengthy process that potentially paves the way for bank account holders to reclaim billions of pounds in fees.

A High Court ruling allowed the OFT to press ahead with an investigation, begun in March 2007, to determine whether banks can legally charge customers who slip into the red without prior agreement. But the judge stopped short of saying whether charges for unauthorised overdrafts were unfair.

On April 17, the OFT alleged 112 companies building schools, hospitals and other public buildings had formed cartels to boost contract prices by millions of pounds.

In that case, the OFT said over two thirds of the companies named have admitted involvement, hoping to lessen any fine. The maximum fine that can be imposed by the OFT is 10 percent of relevant turnover.

Editing by David Holmes

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