Tesco, Asda and Sainsbury's fined for price-fixing
Which supermarket is the naughtiest? Following evidence Asda, Tesco and Sainsbury's have been price-fixing, Donna Ferguson decides to find out.
The Office of Fair Trading has fined Tesco, Sainsbury’s, Asda and five other supermarkets and dairies nearly £50m for price-fixing.
The watchdog found that the cartel of companies - which also include Dairy Crest, McLelland, The Cheese Company, Safeway and Wiseman - shared pricing intentions via dairy processors back in 2002 and 2003.
This meant these supermarkets were able to charge customers more for dairy products during that period - meaning you and I lost out!
Shockingly, it took the watchdog eight years to conclude its investigation into the price-fixing, despite the fact that one member of the cartel - the dairy Arla - actually blew the whistle (and received immunity from all fines as a result).
It got me thinking: What other naughty things have these supermarkets been getting up to? Which one misleads its customers the most? You decide...
Tesco has been rapped on the knuckles several times for misleading customers.
Last year, for instance, Tesco was ordered by the advertising watchdog to withdraw its ‘Baked from Scratch’ bread campaign because it misled customers into thinking all Tesco shops with bakeries made bread from scratch, when in fact this wasn’t the case.
The ad said: “Fresh bread. Baked from scratch in our in-store bakery. Using 100% British flour.”
But the small print said: “Selected UK stores. British flour used in all products that are baked in store as stickered in pack.” This is because most loaves were part-baked at other sites, then chilled or frozen and re-baked at outlets where they were sold. Just 504 Tesco stores actually baked bread ‘from scratch’ as the ad suggested.
Tesco claimed it was obvious to customers that not all the bread was freshly baked because it was written in the small print.
Similarly, earlier this year, a Channel 4 Dispatches programme found that a fifth of the cod products it tested from Tesco were labelled as ‘responsibly sourced’ Pacific cod - when in fact they were Atlantic cod, which is over-fished and endangered.
Tesco blamed its supplier for the mis-labelling and says it has corrected the labels.
Finally, Tesco was found to be misleading customers about its biggest rival, Asda, in April this year. It wrongly conveyed to customers in a national advertising campaign that 13 fresh foods were not included in Asda’s Price Guarantee, when in fact they were.
Tesco said afterwards the mistake had resulted from an ‘internal communication error’ by a member of Tesco’s advertising team and stopped running the ad. But by that time of course, the damage to Asda was already done....
Asda has been found guilty of misleading its customers too.
Last year, it claimed that “The big Asda Rollback” offered “lower prices on everything you buy, week in, week out”. It went on to say this meant Asda offered “lower prices than any other supermarket”.
Does this mean that Asda’s prices were lower than all of its competitors? Nope. Apparently, the first part of the ad was only referring to Asda’s own prices, and second part was only referring to the prices of three other supermarkets: Tesco, Sainsbury’s and Morrisons.
The advert was found to be ‘ambiguous’ and ‘misleading’ by the Advertising Standards Authority (ASA) - but Asda clearly didn’t learn its lesson as earlier this year, it received another ticking off from the ASA. And guess what it was for this time? Suggesting that their price guarantee applied to all items, when in fact non-grocery items (such as toys, clothes and World Cup 2010 products) were excluded.
The ASA said at the time: “We’ve told Asda to ensure that their ads did not suggest their price guarantee applied to all items, or that their savings claims referred to shopping generally rather than specific items, if that was not the case.”
Asda admitted it shouldn’t have promoted its price guarantee against non-grocery items and the advert was banned. It has since launched a new price guarantee, offering shoppers prices that are “at least 10% cheaper than its rivals or you get the difference”. I’d love to hear what you think about this guarantee and whether it lives up to Asda’s promise.
Sainsbury’s seems to have had fewer run-ins with the advertising watchdog - but it has certainly been up to a few other naughty things recently.
For example, it launched a product called ‘Pitchers’ in the summer of 2009, which looked suspiciously like a bottle of ‘Pimms’ - similar bottle shape, similar colour of drink, similar text and a similar label.
Unsurprisingly, Diageo (the maker of Pimms) decided to sue Sainsbury’s for breaching its intellectual property - despite the fact that Sainsbury’s is one of its biggest customers in Britain. Sainsbury’s then backed down and agreed to change the label and the colouring of the product so that customers could more easily differentiate it from the Pimms brand.
Sainsbury’s never admitted it had done anything wrong.
What else? Well, last year, Which? accused it of “illegally misleading” customers over the pricing of certain products.
The consumer association found that, sometimes, buying “great value” big packs from the supermarket would actually prove more expensive than buying smaller amounts of the product separately.
For example, a triple pack of Sainsbury’s Naturally Sweet Sweetcorn labelled ‘Bigger Pack, Better Value’ was 4p more expensive than buying three individual tins, and a similarly labelled 2kg packet of spaghetti was 27p more expensive than buying two 1kg packets.
Sainsbury’s claimed the mistake was a human error and changed its prices.
Finally, earlier this year, ClientEarth criticised Sainsbury’s for boasting that, in its Taste the Difference range, it “only uses line caught haddock from the clear waters of Norway and Iceland”. If you think this means the haddock is sustainably and responsibly sourced, think again: in fact, ClientEarth found it is fished in places where haddock stock health is at risk due to high fishing levels.
Sainsbury’s responded to the criticism by saying: “We believe in responsible use of language and we strongly welcome ClientEarth’s call for consistency in labelling claims.”
Which supermarket is the naughtiest?
So, which supermarket do you think misleads its customers the most out of Tesco, Asda or Sainsbury's? Or do you think Waitrose or Morrisons or another supermarket is even worse? Let us know your opinion using the comments box below!