Lead, the killer we give to children (uk)
Farmers complain of 'ruthless buyers'
By James Hall and Roya Nikkhah, Sunday Telegraph
Last Updated: 12:56am BST 19/08/2007
Threatening and abusive emails from Britain's biggest supermarkets, bullying farmers and food suppliers into cutting prices, have been uncovered by investigators.
The watchdog is investigating The messages were allegedly sent by Tesco and Asda, warning suppliers to reduce the price at which they sell their food to the retailers - or face being axed.
The emails, understood to contain threatening and aggressive language, have been unearthed by the Government's monopolies watchdog, the Competition Commission. They emerged as the watchdog investigated the practices of the "Big Four" chains - Tesco, Asda, Sainsbury's and Morrisons - as part of a two-year inquiry into their national dominance.
The commission believes it has found a smoking gun and has now ordered Tesco and Asda to submit all emails, letters and taped phone calls between them and their suppliers from a five-week period this summer when they initiated a £520 million round of price cuts.
The email traffic between the two chains and their suppliers was uncovered by investigators as they focused on the period in June and July.
The big supermarkets, who enjoy combined annual sales of £95 billion, have faced growing accusations from shoppers and consumer groups that their retail dominance has left householders with little choice over where they shop and the range of products they can buy.
The stores argue that they are under pressure to keep prices low from customers whose household budgets are increasingly squeezed.
Suppliers have become concerned over the retail chains demanding ever-lower prices, threatening the viability of their businesses and putting some - especially farmers - on the brink of ruin.
Tesco, in particular, has faced a public backlash from MPs and pressure groups, who accuse it of railroading through planning guidelines, and being responsible for the closure of an increasing number of small shops and traditional high-street businesses.
Tesco now controls almost a third of the UK grocery market, and one pound in every seven spent in all British shops goes through its tills. The retailer, which made profits last year of £2.6 billion, has been accused of creating "Tesco towns", where it has almost total dominance.
Critics say at least 25 "corner" shops close every week as a result of big supermarket dominance. Over the past year, more than 1,300 independent stores closed.
Stephen Alambritis, of the Federation of Small Businesses, said: "We believe that this kind of intimidation by the big supermarkets is widespread and are glad that the Competition Commission seems to have unearthed evidence of this as smaller suppliers are so often reluctant to speak out.
"Consumers need to be made aware that when they are buying goods on the cheap, it is often on the back of bullying tactics which force smaller businesses to fold."
Anthony Gibson, of the National Farmers' Union, said: "Whenever supermarkets get involved in price wars, it is always the supplier - the weakest player in the food chain - who ultimately pays."
He added: "Farmers are making huge losses at the moment, and if the supermarkets carry on the way they are, they will have no supply chain left."
A farming industry source said: "You are dealing with some of the most sophisticated, powerful retailers in the world. They are peopled by individuals who have targets to improve their year-on-year profit margins. They are remarkably ruthless buyers."
Mark Prisk, the shadow minister for business and enterprise, said: "It is critical that the big supermarkets understand that all business must be conducted in a free and fair way, and that abuse of the system, particularly against the smaller suppliers, is completely unacceptable and must be challenged."
The retail chains argue they are under pressure to keep prices low. With household spending budgets being squeezed by rising interest rates, the chains have slashed prices in an effort to entice shoppers through their doors. Figures last week showed that inflation fell in July largely because of supermarket price cuts.
Tesco and Asda argue that they provide shoppers with conveniently located stores and cheap prices that simply did not exist years ago.
A Tesco spokeswoman said the retailer had "nothing to hide and will comply fully with the request". An Asda spokeswoman said the company was co-operating with the investigation.
A spokesman for the commission confirmed that it had demanded all correspondence from Tesco and Asda to their suppliers over an unspecified period earlier this summer.