The entrance of Tesco, Sainsbury's or Asda to Jersey would not necessarily lead to falling grocery prices - because they could fix prices artifically high, business leaders on the island have warned.
Entry by one of the big three is believed to be imminent as part of local government plans to create more competition in Jersey's grocery market.
But the Jersey Chamber of Commerce has warned that whichever retailer opens on the island might be tempted to engage in 'price flexing' and hike up prices to reflect Jersey's high cost of living.
"In the last UK Competition Commission review [in 2000] Tesco and Sainsbury's were found to operate regional pricing policies," said Ray Shead, chairman of the chamber's retail and supply committee.
The chamber's concerns will be fuelled by the publication last week of the commissions's Emerging Thinking on its latest grocery inquiry, in which it said: "Asda, Morrisons, Sainsbury's and Tesco... all adjust their offering at the local level."
The chamber is opposed to government plans to approve the development of a new supermarket because it fears the store will harm existing retail businesses.
It also disputes official figures indicating there is retail under-capacity on Jersey.
Speculation is rife regarding the site of the new store, and the identity of retailers involved in projects remains a secret. It is likely that the UK's top three multiples - none of which are on the island - are eyeing Jersey's affluent population.
Morrisons is not believed to be in the running to open a store. It sold a supermarket on the island inherited in the Safeway deal, and it would be a surprise if it re-entered now.
The chamber has called on Jersey's government to suspend the States of Jersey Retail Framework, which recommends expansion of retail space on the island, until further analysis into the impact of a new supermarket has been carried out.
Entry by one of the big three is believed to be imminent as part of local government plans to create more competition in Jersey's grocery market.
But the Jersey Chamber of Commerce has warned that whichever retailer opens on the island might be tempted to engage in 'price flexing' and hike up prices to reflect Jersey's high cost of living.
"In the last UK Competition Commission review [in 2000] Tesco and Sainsbury's were found to operate regional pricing policies," said Ray Shead, chairman of the chamber's retail and supply committee.
The chamber's concerns will be fuelled by the publication last week of the commissions's Emerging Thinking on its latest grocery inquiry, in which it said: "Asda, Morrisons, Sainsbury's and Tesco... all adjust their offering at the local level."
The chamber is opposed to government plans to approve the development of a new supermarket because it fears the store will harm existing retail businesses.
It also disputes official figures indicating there is retail under-capacity on Jersey.
Speculation is rife regarding the site of the new store, and the identity of retailers involved in projects remains a secret. It is likely that the UK's top three multiples - none of which are on the island - are eyeing Jersey's affluent population.
Morrisons is not believed to be in the running to open a store. It sold a supermarket on the island inherited in the Safeway deal, and it would be a surprise if it re-entered now.
The chamber has called on Jersey's government to suspend the States of Jersey Retail Framework, which recommends expansion of retail space on the island, until further analysis into the impact of a new supermarket has been carried out.
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