Gone fishing…

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Here we go again. Seemingly, barely a week goes by without a raid by the UK’s Office of Fair Trading on Britain’s leading supermarkets.

Recent investigations have centred on milk and tobacco, but the latest raids, which took place at the end of last week, relate to pricing of groceries, health and beauty products and detergents. CPG giant, Procter & Gamble, was visited along with grocery retailers, Tesco, Asda, J Sainsbury and Wm Morrison.

But, what’s going on here? Whereas it’s desirable that unacceptable and unfair trading practices should be sought out, undertaking a continuous and unrelenting campaign against key players in one particular market sector seems a little over the top. Are they really sure something is going on, or are they just fishing?

Interestingly, in the next few days the Competition Commission is to publish its latest investigation into the grocery sector and is expected to call for the establishment of a Supply Ombudsman to oversee relationships between retailers and their suppliers. This could be a sensible approach, especially in the light of rising food costs and the difficulties suppliers face in passing these costs on. Government figures indicate that food prices in the UK rose 5.5 per cent in the year to March.

With escalating fuel prices and rising inflation logistics service providers may also be pleased to hear of the prospect of a Supply Ombudsman. However, I suspect that if things really got as bad as having to call in an ombudsman the life expectancy of the contract would be very short indeed.

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