"Compelling" new evidence of the damage inflicted by persistent below cost selling should force the OFT to launch a fresh investigation into the practice, claimed the Federation of Bakers. Research by Professor Paul Dobson at Loughborough University and commissioned by FoB provides conclusive proof that loss leaders are damaging for manufacturers, counterproductive for retailers and ultimately bad for the consumer, said FoB director John White. Rather than just whining about the status quo, the Dobson report also looks at the impact of bans on below cost selling in Europe and explores how these could work in the UK, said White. In his report, Dobson claims 6% of supermarket sales comprise products with gross margins of less than 5%, meaning net margins are probably negative. "Retailers have got themselves into a trap," said White. "There was initial excitement when prices first came down, but constantly selling bread at 19p doesn't drive any more traffic or boost sales at the bread fixture. "The only way to tackle this is legislation that will broaden the base of price competition so that it is not concentrated on KVIs, but spread across more categories." Although the Competition Commission expressed concerns about below cost selling in its inquiry into supermarket pricing last year, no action was taken, he said. {{NEWS }}