Free Essay

Office Fair Trading

In: Business and Management

Submitted By ahc1995
Words 373
Pages 2
Because the Office of Fair Trading (OFT) has said that the UK's four biggest supermarkets, Asda, Tesco, Morrisons and Sainsbury's, colluded with dairies to keep the price of milk and other dairy goods artificially high between 2002 and 2003. The watchdog says that consumers ended up paying £270m over the odds for milk, cheese and butter as a result of the price-fixing deal. It has added fresh impetus to the argument that the UK's supermarkets have become so big that they are able to dictate to suppliers and customers alike, with decisions on how much consumers should pay being decided by a small group of executives.

Their size allows them to have a huge power over their suppliers. Supermarkets have been accused of squeezing their suppliers to sell their produce for tiny profits, leading the National Farmers' Union to suggest that some suppliers lived under a "climate of fear and oppression". And while market watchers were reporting an upward trend in food prices this summer, Asda was introducing the £2 chicken. Suppliers were soon crying that they could not keep production costs down.
It's not just domestic producers who are feeling the pinch from the hard bargaining driven by supermarkets. A report by Action Aid published earlier this year said that in order to deliver low prices to consumers, workers for supermarket suppliers abroad were receiving poor wages, job insecurity and were being denied basic human rights. It said that women in particular were suffering as a result.

The opening of smaller convenience-style stores by supermarket chains has also been criticised for killing traditional local shops, important to community spirit. Further worries have been raised about the new markets into which supermarkets are entering. It's not just electrical equipment or clothing that is now offered at cut prices in the aisles of Tesco. It is also a place to go for banking. You can even take out a mortgage in between trips to the fish counter and the fresh fruit. Tesco has also been accused of stockpiling a "landbank" of potential sites for future stores

Bbc reported that the OFT wants an investigation to the competition commission over competition supermarket and the local shops and butchers as half have disappear .

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