Nisa-Today's launched a scathing attack on
Tesco when it met the Competition Commission, it has emerged.
In what could be the most damaging evidence yet to come out of the Commission's grocery market investigation, Nisa-Today's accused Tesco of colluding with suppliers to drive costs up for its competitors - a claim which Tesco has denied.
In its hearing with a delegation from Nisa-Today's on 29 September, the inquiry team discussed issues relating to planning, pricing and competition.
In the controversial area of pricing, Nisa claimed it was aware of instances in which suppliers looking to increase their prices to retail customers would first approach Tesco. It was then Tesco's agreement that allowed suppliers to negotiate similar increases with other multiples.
But - sensationally - Nisa told the Commission that Tesco would then request a payment for helping the supplier - which the supplier seemed content to pay, having achieved a price increase from its other customers.
Nisa-Today's group symbol development director John Heagney, who attended the hearing, said that the evidence for this had come from a senior executive at a major grocery supplier, who had made the revelation in a face-to-face meeting with former chairman Dudley Ramsden. Heagney also revealed Nisa had given the inquiry a document that demonstrated a 23% discrepancy between the terms offered by one supplier to independents and those enjoyed by Tesco on certain products.
This document remains safely locked in the safe at the Competition's Commission's HQ in London. "We accept the multiples will have better terms because of their scale but this is a massive disparity," said Heagney. "It is something that's been talked about for a long time but this is the first hard evidence proving the point."
Tesco director of communications Jon Church rubbished the allegations. "This sounds completely wrong," he said. "If suppliers want to negotiate cost increases we do it for ourselves. There have been a lot of rumours, myths and speculation surrounding this inquiry. This does upset us. We are keen to set out the truth on our Talking Tesco website."
On the subject of buying power, Church said that the Commission would have to reach its own conclusions. But he said Tesco believed the advantages of scale were not that great.
Nisa also criticised Tesco's Express model for limiting choice. It told the inquiry that Tesco was effectively selecting which products would be available to consumers as it would only put the most expensive variant of a particular branded product in stores.
Heagney said this was less of a problem for his members as he claimed that stores near Tesco Express were selling more as they offered a greater choice than their multiple rival.
At another hearing, the Federation of Small Businesses said proliferation of multiples in town centres was a barrier to entry for independent businesses because it pushed up rents and business rates. It also claimed the strength of the multiples would cause a reduction in consumer choice as diversity in the market fell away.
Tesco when it met the Competition Commission, it has emerged.
In what could be the most damaging evidence yet to come out of the Commission's grocery market investigation, Nisa-Today's accused Tesco of colluding with suppliers to drive costs up for its competitors - a claim which Tesco has denied.
In its hearing with a delegation from Nisa-Today's on 29 September, the inquiry team discussed issues relating to planning, pricing and competition.
In the controversial area of pricing, Nisa claimed it was aware of instances in which suppliers looking to increase their prices to retail customers would first approach Tesco. It was then Tesco's agreement that allowed suppliers to negotiate similar increases with other multiples.
But - sensationally - Nisa told the Commission that Tesco would then request a payment for helping the supplier - which the supplier seemed content to pay, having achieved a price increase from its other customers.
Nisa-Today's group symbol development director John Heagney, who attended the hearing, said that the evidence for this had come from a senior executive at a major grocery supplier, who had made the revelation in a face-to-face meeting with former chairman Dudley Ramsden. Heagney also revealed Nisa had given the inquiry a document that demonstrated a 23% discrepancy between the terms offered by one supplier to independents and those enjoyed by Tesco on certain products.
This document remains safely locked in the safe at the Competition's Commission's HQ in London. "We accept the multiples will have better terms because of their scale but this is a massive disparity," said Heagney. "It is something that's been talked about for a long time but this is the first hard evidence proving the point."
Tesco director of communications Jon Church rubbished the allegations. "This sounds completely wrong," he said. "If suppliers want to negotiate cost increases we do it for ourselves. There have been a lot of rumours, myths and speculation surrounding this inquiry. This does upset us. We are keen to set out the truth on our Talking Tesco website."
On the subject of buying power, Church said that the Commission would have to reach its own conclusions. But he said Tesco believed the advantages of scale were not that great.
Nisa also criticised Tesco's Express model for limiting choice. It told the inquiry that Tesco was effectively selecting which products would be available to consumers as it would only put the most expensive variant of a particular branded product in stores.
Heagney said this was less of a problem for his members as he claimed that stores near Tesco Express were selling more as they offered a greater choice than their multiple rival.
At another hearing, the Federation of Small Businesses said proliferation of multiples in town centres was a barrier to entry for independent businesses because it pushed up rents and business rates. It also claimed the strength of the multiples would cause a reduction in consumer choice as diversity in the market fell away.
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