Sainsbury's backs down
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.'
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