Tesco among big stores raided over 'price fix'

The country's biggest supermarkets have been raided by consumer watchdogs over allegations of price fixing.

Tesco, Asda, Sainsbury's and Morrisons were among the companies whose headquarters were targeted by the Office of Fair Trading (OFT), The Sunday Telegraph can disclose.

The offices of their major suppliers have also been visited as part of an investigation into allegations that they colluded to fix the prices of groceries and health and beauty products.

The watchdog is understood to have seized hundreds of emails between the retailers and their suppliers during Thursday's surprise raids, which involved almost 100 investigators and lawyers.

The inquiry is believed to be the biggest in the history of the OFT, which seeks to ensure that the public benefits - through lower prices - from genuine competition between companies. It comes amid mounting concern about soaring food prices.

Research published last week claimed that families were spending almost £800 more a year on groceries. The cost of a "typical" basket of 24 basic items has risen by 15 per cent in a year.

Supermarkets have made huge sums. Tesco unveiled record profits of £2.8 billion this month and now takes more than £1 of every £8 spent in the high street.

The disclosure of the OFT investigation into alleged price-fixing comes as a lengthy inquiry continues into claims that the price of milk is fixed. On Friday, the regulator announced that it was stepping up another inquiry into price-fixing of tobacco products.

Business leaders, however, are critical of the OFT, questioning the tactics adopted by the regulator since the appointment of John Fingleton as chief executive in 2005. He has led high-profile investigations of the construction, banking and retail industries and fined British Airways £121.5 million over illegal talks with a rival.

An OFT spokesman said last night that it did not comment on investigations. The supermarkets, however, strenuously denied acting illegally.

The Competition Commission will this week publish the results of a separate two-year investigation into the grocery market.

Source: Sunday Telegraph