Suppliers have been told

by the Competition Commission to reveal the terms they offer their customers - including any payments they make to them - and have been warned that if they do not comply they could be forced to do so.

In a major development, the Commission has written to 40 major manufacturers asking for details of the prices they have charged different customers for their top six branded SKUs, by value, over the past five years.

In the letter, seen by The Grocer, the Commission tells suppliers it wishes to establish whether large multiples are charged lower prices for goods than smaller retailers and wholesalers and, crucially, why when the lower price is not the result of larger volumes or transport costs. Such information, which is due in to the Commission by the end of this month, could be used by the inquiry team to establish whether supermarkets' buyer power gives them an unfair advantage over smaller competitors and, in particular, leads to a 'waterbed' effect.

Proponents of this theory claim multiples screwing down suppliers on price leads to those suppliers raising prices to other customers in a bid to maintain margins - an allegation hotly disputed by the big retailers.

In its letter to suppliers, the Commission also asks for details of any fixed payments made to a customer over the past five years, what these related to and how frequent they were. In addition it requests other costs associated with supplying retailers, including those linked to promotions.

News of the letter came as it grew increasingly clear that, in the six months since the inquiry began, participation by manufacturers has been minimal.

Only six submissions from suppliers, two anonymous, have appeared on the Commission's website.

These do not represent the totality of engagement by manufacturers.

Others, such as Ferndale Foods, which lost a ready meal contract with Asda last year in controversial circumstances, have either made submissions not yet published online or have had hearings with the inquiry team behind closed doors. But with the treatment of suppliers by buyers in the inquiry's spotlight there is likely to be surprise that more have not taken advantage of the opportunity presented by the investigation to air grievances.

The most likely explanation for suppliers' reticence is that they are fearful of a backlash from customers. But the Commission this week warned suppliers they were mistaken if they believed they could duck the inquiry.

A spokesman said: "Manufacturers are not a main party in this investigation, so in principle are not compelled to take part. However, there are areas we have been asked to look at which may mean we need more information from them. If we need evidence we can compel people to give it to us, though we don't tend to, as having the power is normally enough to convince people."