Supermarket giants Tesco, Asda threatened

Published: Saturday 15 September 2007

Two supermarket giants--Tesco and Asda--in the UK have been accused of sending "threatening" e-mails to suppliers, farmers and dairy producers, to keep their prices low. The Competition Commission's Inquiry, instituted in May to study supermarkets behaviour towards food producers and farmers, revealed this recently. Tesco and Asda are part of four major retail outlets in the UK. The other two are Sainsbury's and Morrisons.

The commission has demanded that the two chains submit all e-mails and other written contracts with their suppliers over a five period week earlier this summer. The commission will scrutinise all the mails for evidence of abusive behaviour and this could lead to laws curbing supermarkets' power.

There have been reports of widespread resentment among dairy farmers who allege that the "biggies" have been bullying them into selling their produce at dirt cheap rates. Such low rates, they say, have forced several producers to go out of business because they were unable to cope with the prices quoted by the retailers. Suppliers say whenever supermarkets cut prices or offer two products at the cost of one, it is the producers who have to bear the brunt.

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