Retailers and suppliers have been left reeli ng by the shock intervention of the OFT over alleged price-fixing between the multiples and major suppliers with the new enquiries threatening to completely undermine this week's final report by the Competition Commission.

Just days before the commission concluded that the grocery market was "broadly competitive", finding "no evidence of collusion", a SWAT team from the OFT, which is headed by John Fingleton, turned up unannounced at the offices of several retailers and suppliers seeking evidence of collusion over price. The investigation is believed to centre on the big four and more than 100 leading grocery brands covering suppliers such as P&G, Mars UK, Unilever, Warburtons, CCE and Britvic. The timing of the raids was even more surprising as they came just a day after the OFT was forced to apologise to Morrisons and pay the retailer £100,000 in damages after admitting it had wrongly accused the supermarket of dairy price-fixing.

Understandably the retailers have been less than impressed by the shock OFT intervention, accusing the watchdog of confusing consumers and wasting taxpayers money.

"The public will be confused that it now appears the two regulators seem to have different points of view," said one supermarket insider. "Surely at a time of rising inflation, the industry should be left to focus on doing what it does best - cutting prices, not paying lawyers millions of pounds proving it isn't involved in dodgy dealing in smoke-filled rooms," he added.

Tesco corporate and legal affairs director Lucy Neville-Rolfe also expressed exasperation at the latest OFT actions.

"There is a frustration that it all seems to be happening in one week," said Neville-Rolfe, "especially as we have been recognised for bringing competition to new areas as well as core grocery lines."

Duncan Swift, head of food and agribusiness recovery at Grant Thornton, said suppliers had lost confidence in the OFT and its recent tough stance was "closing the stable door after the horse had bolted".

Suppliers emerged arguably as the biggest winners in the commission's inquiry, however. After two years of investigation, estimated to have cost the industry £200m, according to one source, it concluded: "UK grocery retailers are in many respects delivering a good deal for consumers."

The real surprise was in the details of a new tougher Groceries Supply Code of Practice and the powers granted to the proposed ombudsman who will monitor the code.

Retrospective adjustments to terms of supply are to be prohibited, along with arrangements that result in suppliers being liable for shrinkage. Retailers must also provide notice of a reason for delisting or significantly reducing suppliers' business and must keep written records of all agreements with suppliers in terms of supply.

As expected the commission also recommended the inclusion of a competition test in planning decisions on larger grocery stores and a ban on restrictive covenants on property that could restrict entry by competitors.

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