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Supermarkets: Prices

Volume 475: debated on Thursday 15 May 2008

To ask the Secretary of State for Business, Enterprise and Regulatory Reform whether he has made a recent assessment of whether supermarkets have engaged in price fixing of (a) cigarettes and (b) milk. (205209)

Allegations of price fixing is an infringement under the 1998 Competition Act and is a matter for the Office of Fair Trading (OFT).

(a) Tobacco and Tobacco products

The OFT issued a statement of objections on 25 April alleging that certain tobacco manufacturers and retailers and eleven retailers have engaged in unlawful practices in relation to retail prices for tobacco products in the UK.

The statement of objections sets out the OFT's proposed findings against tobacco manufacturers Imperial Tobacco and Gallaher and eleven retailers- Asda, the Co-operative Group, First Quench, Morrisons, Safeway, Sainsbury, Shell, Somerfield, T&S Stores, Tesco and TM Retail. The OFT's investigation is currently ongoing.

(b) Milk and Dairy Products

The OFT issued a statement of objections on 20 September 2007, which found provisional evidence of collusion between certain large supermarkets (Asda, Morrisons, Safeway, Sainsbury's and Tesco) and dairy processors (Aria, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman) on the retail prices of some dairy products. Some of these parties have now admitted involvement in anticompetitive practices and have agreed to pay individual penalties which combine to a maximum of over £116 million. The OFT are continuing their case against the remaining parties.