The CMA has launched a probe into UK supermarkets allegedly using Aldi price match schemes as a way of ‘profiteering’ off their customers during the cost-of-living crisis.
According to The Grocer, the government authority has gathered evidence against UK retailers ahead of an initial report due to be published next week.
Chancellor Jeremy Hunt is said to be meeting with CMA bosses today to urge them to do all they can to ensure retailers tackle inflation and report any suspicions of unfair practices.
However, the British Retail Consortium (BRC) has defended supermarkets, saying there had been a “regular stream of price cuts” by supermarkets despite “extremely tight” profit margins.
Yesterday, bosses at leading supermarkets denied accusations that they were profiteering and inflating profit margins, as they gave evidence to a cross-party committee of MPs.
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Executives from Tesco, Asda, Sainsbury’s and Morrisons all made claims that they had been doing everything possible to keep prices down amid the cost-of-living crisis.
Tom Smith, a former CMA director and now competition lawyer at Geradin Partners, told The Grocer: “If lots of supermarkets are promising to match each other’s prices, there’s less incentive for them to drop their prices because they know everyone else will match it, and they will realise that would leave them all worse off.
“It might be something that’s pro-competitive if only a few people are doing it, but becomes anti-competitive if there is a web of price matches covering a lot of the sector.”
Smith added: “It seems like something the CMA could discuss in their report and say they are going to monitor it, although it would be tough to prove it is actually pushing prices up.”
Ged Futter, founder of The Retail Mind, also commented: “There is no proof whatsoever that any retailer has been profiteering and the suggestion that the Aldi price matching could be highlighted is ridiculous.”
“Aldi price matching is doing exactly the opposite of increasing inflation. Is that a practice the CMA wants to stop?” Futter said.