The OFT, the only government department that generates more column inches than Paris Hilton, is launching yet another probe into the Big Four supermarkets. This time the investigation is around possible price-fixing of health, beauty and grocery products – so as well as the supermarkets, consumer goods giants like Proctor & Gamble, Unilever and Mars are also under the microscope.
The watchdog apparently raided the offices of Tesco, Asda, Sainsbury’s and Morrisons last Thursday to collect paperwork and other information from buyers, while P&G has admitted that it also received a visit. All are naturally protesting their innocence and insisting they will fully comply with the process etc etc etc, although by all accounts they’re less than amused at this latest imposition – one executive told the FT that the raids were nothing more than a ‘fishing expedition’.
Of course, it’s not exactly the first time the OFT has gone after the supermarkets. It’s also investigating several of them for colluding with manufacturers to fix the price of dairy products, while only last week it issued a ‘statement of objections’ alleging that they’ve also been illegally manipulating the retail price of cigarettes (again, in conjunction with the manufacturers). So either the Big Four really are incorrigible repeat offenders, or the OFT’s obsession with landing a big retail fish is reaching Captain Ahab proportions.
Certainly the retailers are getting rather hacked off with these high-profile probes – not surprisingly, given that they tend to involve a series of reputation-damaging allegations being made public before they’re actually proven. Morrisons managed to strike a victory for the cause by last week by forcing the OFT to pay out £100,000 to settle a defamation case, along with an abject public apology – but it looks as though the regulator is determined to have the last laugh (they were straight on the phone to us last week to point out that the pay-out didn’t mean Morrisons was out of the woods – now we can see why…)
Of course it could be that this time they have a water-tight case (the BBC is suggesting that one of the Big Four may have turned informer in a bid for leniency) – and for the sake of taxpayers’ money, we certainly hope so. But one thing’s for sure: with the latest Competition Commission report on the grocery sector also due out this week, it should be an interesting few days for the Big Four...