Tesco unites with foes in cut-price row

23 February, 2007

Laura Clark

Tesco has joined Asda and Sainsbury's in defending its cut-price alcohol promotions in its third submission to the Competition Commission.

Responding to a convenience retailer's complaint that it sells bottled lager and cider below cost during big televised events such as the World Cup.

Tesco admitted that it does run "promotions of that kind", but said such products are priced higher for the majority of the year.

It added that its cheap alcohol deals do not necessarily threaten small shops. According to Tesco, lack of space meant that its Express stores did not run the promotions complained about during the World Cup. It added: "These stores did not participate in the promotions cited by the convenience retailer, but sales of beer in our Express stores significantly outperformed our larger stores on the day of the first England match, demonstrating that convenience stores are well-placed to compete with these promotions."

The ACS has called on the Competition Commission to delve deeper into the grocery market, claiming there is still evidence of the major multiples abusing their buying power.

In its latest submission to the watchdog's Emerging Thinking document, the ACS maintains that there are "enormous gaps in the information gathered by the commission". It argues that the commission's approach to finding out about buying price practices has been "woefully inadequate".

ACS chief executive James Lowman said: "We are convinced that there is evidence of the major grocery multiples abusing buyer power and manipulating prices at a local level, and the commission must leave no stone unturned ."

The ACS will attend a second hearing with the commission on May 4. Meanwhile, the number of MPs who have signed up to an Early Day Motion urging drinks shops to end "irresponsible drinks promotions" has risen to 115.

Supermarkets should sign up to a code of practice to stop them selling alcohol below cost, according to the National Off-Licence Association. NOffLA, which represents drinks shops in the Republic of Ireland, said alcohol should have been made exempt from a relaxation of laws relating to below-cost selling.




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