Sainsbury's backs down

Patrick Tooher|Mail13 April 2012

SUPERMARKET giant Sainsbury has backed away from imposing harsh new payment terms on 1,900 suppliers after Financial Mail highlighted its bully-boy tactics.

It has agreed to mediation after intervention by the Office of Fair Trading. Its report on a widely discredited code of conduct governing relations between supermarkets and their suppliers is expected soon.

Meanwhile, as calls grow for a new Competition Commission inquiry to curb the power of supermarkets, Tesco has admitted to 'thousands of price increases every week'.

Rivals have long argued that Tesco more than covers the cost of price promotions by raising prices on best-selling products.

A recent submission to the Office of Fair Trading from the Association of Convenience Stores, which represents small grocers, highlighted the widespread practice of selling popular items at below cost.

In its last review of the sector five years ago, the commission said that this tactic, penalising smaller retailers and elderly, less mobile customers, was anti-competitive and against the public interest.

In its latest letter to the Office of Fair Trading, the association said: 'Cross-subsidising lossmaking products from the revenues of higher-margin items puts large supermarkets at a competitive advantage.'

If you have come across bullying and want to blow a raspberry to the supermarkets, e-mail patrick.tooher@mailonsunday.co.uk or editor@thisismoney.co.uk. Put the word raspberry in the header field. We won't reveal your name or e-mail address.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in