Watchdog braced for 12m e-mails in grocers inquiry
From The Times
August 20, 2007
David Robertson
The Competition Commission is about to be deluged by more than 12 million e-mails from supermarkets and their suppliers as part of an investigation into alleged threats by the stores.
The Commission has issued Tesco and Asda with a Section 109 request asking for all communications between the supermarkets and their suppliers during June and July.
Asda said yesterday that this could be up to 11 million e-mails. Tesco believes that even after sifting out irrelevant communication it will still present the Commission with more than a million documents.
A spokesman for the Commission said: “I think we may need to bring in help. We are working on the exact logistics of how to do this and our aim will be to investigate fully and speedily.”
The Commission is in a two-year inquiry into the market dominance of the “Big Four” retailers: Tesco, Asda, Sainsbury’s and Wm Morrison.
The investigation was triggered by fears that the supermarkets are using their dominance to squeeze suppliers and small retailers unfairly.
The specific request for information from Tesco and Asda is believed to have been made after the Commission received a tip-off from a supplier.
It was reported yesterday that the two supermarkets sent threatening e-mails to suppliers demanding discounts before launching a round of summer price cuts. Both companies have rejected this accusation and said that they would cooperate with the Competition Commission’s request.
Sainsbury’s and Wm Morrison have not been asked to supply information in this part of the investigation.
A spokeswoman for Tesco said: “We are confident that once the Commission has searched through the millions of e-mails involved, they will find that our relationships with suppliers are professional, that we comply with the industry code of conduct and the steps we take to lower prices bring huge benefits to consumers in this country.”
An Asda official said: “We take our responsibility to our suppliers very seriously as it is a partnership that is vital to both of us.”
The full Competition Commission inquiry into supermarkets is expected to be published next February. Retail analysts suggested yesterday that the Commission’s request for information from Tesco and Asda may indicate that it has found evidence of market manipulation.
Campaign groups argue that the dominance of the retailers, and of Tesco in particular, allows them to drive smaller businesses out of some towns. The supermarkets counter this by saying that they are simply pushing down prices to reflect consumers’ demand for cheaper food.
