Supermarkets face new fair trading probe

Britain's big four supermarket groups are to face further investigation by the Office of Fair Trading amid continuing concerns they abuse their power over suppliers.

The Government brought in a supermarket code of practice two years ago in an effort to protect food suppliers against the might of the big retailers.

But after a year-long review, the OFT said today, many suppliers still share a "widespread belief" that the code is not effective. It has been unable to obtain firm evidence of abuse because suppliers are reluctant to complain formally about their biggest customers.

The OFT now plans to conduct a "focused compliance audit" of the four big retailers - Tesco, Asda, Sainsbury and Safeway.

This will concentrate on specific allegations of slow payment, retrospective price reductions imposed on suppliers and demands for contributions to marketing costs. It will also look at claims of suppliers making payments to win contracts.

The OFT, which said as many as 85 per cent of suppliers believe the code fails to protect them, hopes to publish its findings later this year.