KEY POINTS:
LONDON - Britain's competition watchdog has asked supermarkets Tesco and Asda to hand over millions of emails as part of its investigation into whether the big chains are exerting undue pressure on suppliers.
The Competition Commission said yesterday it had sent out legal notices to two supermarkets demanding confidential information. Asda and Tesco said they had been approached and were providing emails sent to suppliers at the end of last year and early this year.
The watchdog has been investigating Britain's £125 billion grocery market since March last year after complaints about its rapid expansion, predatory pricing and their relationships with suppliers.
"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. "A couple of interesting emails have been brought to its attention."
A spokesman for Asda said the firm would help the commission, although it might have to sift through 11 million emails.
A Tesco spokesman said the group had nothing to hide, and was doing what it could to assist the commission with "this enormous data request". "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 that there were few signs grocery suppliers' profits were being squeezed by the supermarket giants.
It also indicated that predatory pricing by the largest grocery retailers could be acceptable if it benefited the consumer, even though the practice could unintentionally drive smaller suppliers out of business.
But 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, are expected by the end of the year.
- Reuters
