Two stories vied for space at the start of the year - the publication of the Competition Commission's Emerging Thinking document and the deepening crisis at discount chain Kwik Save.

Led by Peter Freeman (right), the commission announced that it was scrapping its two-market definition and was instead working on a new system that would take local situations, fascias, offers and price into consideration. The document also dismissed the idea that the overall grocery market could be assessed on a nationwide basis, deciding instead to look at the industry at a local level.

Meanwhile, several store managers at Kwik Save set alarm bells ringing about the future of the company after revealing that they had not received deliveries since 22 December. TNS figures showed that Kwik Save's market share in the 12 weeks to 31 December slumped to 0.2% from 1.5% a year earlier.

Tesco was accused by independent retailer Harry Tuffins of using bully-boy tactics. The Powys-based retailer claimed Britain's biggest supermarket was trying to sabotage the opening of its Ludlow store by offering shoppers £10 off their bills when they spent £30 in store. Tesco responded by calling it an "unfortunate coincidence".


In the same week Ofcom's controversial ban on advertising junk food to children started to kick in, The Grocer launched its Weigh It Up! campaign to expose the absurdities of the Nutrient Profiling Model (see page 36).

Bird flu was discovered at Bernard Matthews'Holton site in Suffolk, sparking the first major food scare of the year - and the first outbreak proper in the UK of the H5N1 strain of avian influenza (a wild swan had tested positive for the strain in Soctland in 2006). It was initially thought the virus, which forced Bernard Matthews to cull 160,000 birds, had entered the country via wild birds, but the company later admitted birds had arrived in Suffolk from Hungary, where there had been outbreaks of H5N1.

Meanwhile, the days looked numbered for Kwik Save despite a £70m cash injection in the business by Irish property and investment company, Howard Holdings.

And retail experts warned that a private equity takeover of Sainsbury's would spell disaster for the chain's suppliers following the disclosure that a CVC, KKR and Blackstone consortium was working up an £11bn bid for the retailer.


Kwik Save CEO Paul Niklas secured a fresh refinancing bid to rescue the supermarket from the brink of collapse. The move came after Howard Holdings pulled out of a deal to invest in the faltering discount chain. Niklas admitted more store closures would be on the cards, however.

Sainsbury's CEO Justin King announced the chain would scrap its traffic-light labelling if GDAs won public support. The retailer, which uses traffic light labelling for its Wheel of Health front-of-pack logo, said it would follow consumer demand and redesign packs if necessary.

Patak's put the for-sale sign up when it appointed merchant bank Rothschild to review its strategic operations. Premier Foods, ABF and Unilever were thought to be in the running but ABF eventually won the battle in May, shelling out a reported £100m.


The government and other "renegade agencies without portfolio" were threatening the future of the British cheese industry, claimed senior industry figures polled by Dairy UK. Just 2% felt the government supported the cheese industry, while 52% believed it was actively anti-cheese.

David Cameron lent his support to the Weigh It Up! campaign, calling the FSA's Nutrient Profiling Model "crude, ludicrous and a matter of national concern". The Tories pledged to review the NPM and called on the government to rethink its use of a 100g measure.

The first bid for Sainsbury's collapsed. But property tycoon Robert Tchenguiz upped his stake in the retailer again and put pressure on the board to split the business into two companies under an opco-propco structure. A couple of weeks later the Qatari-backed Delta Two fund started to build its stake in the retailer, setting the foundations for a second private equity play.

Tesco launched a thinly veiled attack on Asda in its submission to the Competition Commission, slamming calls for planning authorities to carry out a competition test that favoured new entrants into a local market.

Steven Esom sent the rumour mills into overdrive with his shock defection from Waitrose to M&S sparking speculation M&S had found Stuart Rose's heir apparent.

Walkers became the first brand to carry the Carbon Trust's carbon footprint label as concerns rose over proliferating schemes.


Undercover journalists working on the shop floor in Tesco and Sainsbury's stores found staff changing the dates on meat in order to sell it up to six days after its sell-by date, re-freezing shellfish and breaching hygiene and food safety rules. BBC1's Whistleblower programme also uncovered dirty working conditions at ready-meal supplier Katsouris and bins full of dead chickens crawling with maggots at Crown Chicken.

Meanwhile, Mars UK created a furore by switching the recipe of some of its best-known confectionery brands to a non-vegetarian friendly recipe.

The Competition Commission started to throw its weight around in the groceries inquiry by threatening to use its statutory powers to uncover the identities of suppliers who claimed they were being mistreated by the big four multiples. The commission issued a Section 109 notice to trade associations insisting they hand over papers relating to complaints by suppliers.

Innocent Drinks courted controversy when it signed a deal to sell its products through McDonald's restaurants. The company was accused of selling out by some consumers, but the company defended its position, saying it had consulted its workforce over the matter.


Eggs fell foul of TV advertising rules, with the British Egg Information Service (BEIS) being told it could not re-run ads from its 1960s 'Go to Work on an Egg' campaign starring Tony Hancock.

"Our experts in food and nutrition

came to the decision that the message to start every day with an egg was nutritionally unsound," said the Broadcasting Advertsing Clearance Centre copy group manager Alice Shelley.

Milk hit the headlines after The Grocer revealed Asda had been forced to drop whole milk from TV adverts featuring comedian Paul Whitehouse because they breached Ofcom's rules on advertising.

The first signs emerged that Kwik Save would be reborn as FreshXpress, fronted by Paul Niklas and Irish property tycoon Brendan Murtagh - the men who tried to save the chain in March.

A poll by Harris Interactive indicated that 49% of consumers felt supermarkets weren't doing enough to tackle ecological issues. The survey of 1,038 shoppers found 88% thought suppliers should be doing more to reduce packaging.

Whole Foods Market finally opened its eagerly anticipated store on London's fashionable Kensington High Street and announced that it would look to expand within central London.

Asda was crowned Britain's cheapest supermarket for the 10th year on the trot, having provided the cheapest basket on average according to our annual round-up of prices from The Grocer 33 survey.


On 1 July, the smoking ban came into force in England, preventing people from lighting up in enclosed public places.

Floods ravaged England and forced Unilever UK's only ice cream factory to halt production. The Gloucestershire plant's water was cut off following technical problems at a water treatment centre. Retailers donated hundreds of thousands of litres of bottled water to flood-hit areas and supermarket car parks became distribution centres for the Red Cross and other services.

Sainsbury's received a takeover approach from the Qatari royal family backed by fund Delta Two.

Cadbury Schweppes was fined £1m after pleading guilty to distributing chocolate products contaminated with salmonella at the start of last year. The business still faces civil cases.

Following Brendan Murtagh's acquisition of 56 Kwik Save stores in an £18m pre-pack administration deal, 24 were kept and renamed FreshXpress.


Unilever announced the cull of 20,000 jobs worldwide over four years as it started to dispose of €2bn worth of its businesses. Group chief executive Patrick Cescau said the plans would reduce the 170,000-strong global workforce by 11% and the disposals would include the sale of Unilever's US laundry arm. Any associated restructuring costs would be "more than compensated for by profits on disposals", he claimed.

Palmer & Harvey McLane boosted its position as the UK's biggest wholesaler by purchasing rival T&A Symonds. The move saw P&H take control of a delivered wholesaler with 600 customers.

Fear swept through the farming sector as foot and mouth was discovered on a farm near Guildford in Surrey. The fear turned to anger when it emerged that the likely source of the outbreak was leaky pipes at the government-funded Pirbright virus research facility.

Following allegations Asda and Tesco used retrospective discounts in a threatening way, the Competition Commission began sifting through millions of emails and thousands of phone calls from the two supermarkets.

Asda came under fire for its £2 chicken promotion.


Soaring raw material costs led to a 28% rise in the cost of bread and dairy products, figures from The Grocer 33 survey revealed. Many of the price hikes were attributed to a doubling in the cost of wheat.

Asda threw down the gauntlet to the UK's leading food and drink brands to prove their brand equity by delisting Unilever's I Can't Believe It's Not Butter and Princes tuna brands. It was weeding out needless product duplication, it argued, though its similar own label marge offering stayed on shelf.

The FSA released the names of people that would sit on its NPM review panel.


Suppliers, including Walkers, Nestlé and United Biscuits, announced ambitious targets to reduce their environmental impact. As part of a plan drawn up by the Food and Drink Federation, more than 200 companies pledged to meet government targets of a 20% reduction in CO2 emissions by 2010, and a further 10% by 2020.

Ocado revealed a pre-tax loss of £43m for the 53 weeks to 3 December, but chief executive Tim Steiner insisted the company would become profitable by the first quarter of this year.

Meanwhile, Cadbury unveiled plans to axe 700 jobs in England and shift production of some of its confectionery lines to Poland. The company said it intended to close its 88-year-old former Fry's factory in Keynsham.

John Lewis opened its first food hall, at its store on London's Oxford Street, which it said it would use as a test bed for new products. The 17,000 sq ft food hall had been designed to rival Whole Foods Market, it explained.


The Grocer revealed plans by the European Commission to shake up food labelling by ensuring the amount of energy, fat, saturates, sugar and salt in a product was "included in the principal field of vision of the package" - effectively on the front of the pack.

Tesco launched its highly competitive US retail chain Fresh & Easy Neighborhood Market, opening six stores across California.

Delta Two walked away from its four-month negotiations to buy Sainsbury's - the second failed private equity play for the supermarket chain in a year. Shares promptly fell 20%.

The Competition Commission courted controversy when it produced the provisional findings of its inquiry into the groceries market and claimed that more edge-of-town supermarkets were needed. The Commission also concluded the multiples' moves into c-stores had done independent retailers no harm - and that the wholesale sector was in rude health, with no evidence to suggest its financial viability was in jeopardy.

Asda unveiled the first of a new breed of supermarkets that boast a department-store style layout. The retailer's 100,000 sq ft Patchway store in Bristol was the first to be given the new layout.


Asda won The Grocer 33's first Christmas pricing survey narrowly beating Morrisons with a £112.92 basket, just 32p cheaper than its rival's. The survey compared the prices of festive food, drink and non-food across the big four. Though Asda won, it was beaten on price on some non-food items, notably the top chart CD and DVD.

Asda's chief operating officer David Cheesewright shocked the industry with his announcement he'd be moving back to Canada to become CEO of the country's Wal-Mart operations as of this month. Cheesewright takes over from Mario Pilozzi, who he worked under for a year as COO. His presence will be missed. "Cheesewright wore the trousers at Asda and his departure will create a big hole in the Asda board," said one analyst.

Dorset Cereals denied reports in the press it was up for sale, calling them "wild rumour and speculation". The cereal brand was founded more than 20 years ago and has rocketed in value since being acquired by private equity firm Langholm Capital in 2005 through a management buy-in. The company was approached by suitors from time to time, admitted MD Peter Farquhar, but had not been put on the market.

Asda slammed a Compassion in World Farming survey naming it the worst retailer for animal welfare in the UK. Having refused to participate in the 2007 survey, its eighth place ranking was based on data submitted in 2005.

The government distanced itself from claims it wanted a pre-9pm ban on junk food advertising to children.