U.S. companies in price-fixing probe
Host Scott Jagow talks with our man in London, Stephen Beard, about an investigation by the Office of Fair Trading into allegations that British supermarkets colluded with U.S. suppliers to fix prices.
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Scott Jagow: Grocery shopping has gotten more expensive all over the world. In Britain, it's possible the price increases aren't all from natural causes. The government is looking into price fixing, and some American companies could be involved. Our man in London, Stephen Beard joins us. Stephen, what's the deal here?
Stephen Beard: Well, the Office of Fair Trading here is investigating allegations that the big four supermarket chains in the UK have been colluding with suppliers to fix prices. And we're talking about a very wide range of goods here -- groceries, health and beauty products, razor blades, batteries, soap powder -- and involving some big American names such as Coca-Cola, Procter & Gamble. The suspicion is here that the supermarkets have been talking with the suppliers and, between them, they've been taking advantage in the very steep increase in raw material prices to move together and to push up their retail prices
Jagow: How are investigators to know that it's not just the cost of raw materials?
Beard: Well, they'll look at the exact price increases involved, and they'll also look for evidence of collusion. Already, the Office of Fair Trading has apparently seized e-mails between the supermarket chains and their suppliers.
Jagow: And is this just a British investigation?
Beard: As far as we know, it is just a British investigation. But, as we found with the British Airways price-fixing case last year, there was a direct link to the U.S. However, the UFT does have the power to fine these companies up to 10 percent of their annual sales.
Jagow: All right, Stephen Beard in London. Thank you.
Beard: OK, Scott.
