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May 11, 2006

UK: Supermarket enquiry slated at bakers’ group meeting

The Office of Fair Trading’s decision to investigate the UK grocery sector means huge expense for the industry without providing any new insights into how the market works, according to speakers at a bakery industry meeting in London.

The Office of Fair Trading’s decision to investigate the UK grocery sector means huge expense for the industry without providing any new insights into how the market works, according to speakers at a bakery industry meeting in London.

“It’s going to cost a lot of money,” Brian Robertson, the chief executive of the Allied Milling and Baking Group said in a panel discussion at the end of the Federation of Bakers annual conference in London on Wednesday. “It won’t tell us very much and it will probably last for years,”

Mike Coupe, trading director of supermarket chain Sainsbury’s, said he had been told by his PR people not to say anything.  “We’ve got a team in place who will be dealing with whatever they throw at us,” he said.

“We welcome the fact that it is an industry investigation rather than focusing on what are euphemistically known as the big four,” he said. “In reality there is a big one,” a reference to market leader Tesco.

Julian Hunt, editor of sector magazine The Grocer agreed that the investigation would be expensive and time consuming. “It won’t tell us anything we don’t already know about the market.” 

He believed the OFT had put ‘two fingers’ up to the ‘vociferous’ small business lobby, by including all of the industry, rather than just the big four. The previous investigation had, for example, been a massive drain on the resources of upscale regional supermarket chain Booth’s. “A lot of midsize retailers are going to find themselves spending a lot of time getting to the bottom of this,” he said.

Coupe said that the one unanswered question was what the OFT meant by the grocery industry. “A lot of our competitors are driving their growth with non-food,” he said. “Will they include newspapers? Will they include televisions?”

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