The great grocery rip off

It looks like the Brits never had it any worse, if mounting unemployment, a worsening law and order, pressures of immigration and political uncertainty were not enough the last to join the bandwagon is news that the average Brit pays a whopping 43% more on his groceries than his counterpart in France, Germany or the USA. A glance at the yawning price gap for the most commonly consumed day to day foodstuff show a glaring price gap between the UK and these countries.

A survey conducted with a sample basket of 22 common grocery items being bought across supermarkets in UK, Germany and France showed a significant price difference. France took the cake for being the cheapest with a price difference of 34 dollars followed by Germany which was lesser by 20 dollars and the US with a gap of 19 dollars. Although the price gap was the least in comparison with the US, what made it curious was that the sampling in the US was done at Shaw's super market a store owned by Sainsbury of UK.

The fact that the price gap is most evident in vegetables and meat is disturbing since these are basic essentials. A mink coat, exotic wine or perfume being priced higher would mean that buyers suffered the price difference as rarely as they bought them, which was not the case with everyday essentials like vegetables and meat. A whopping 11% difference in price on these essentials at Marks & Spencer's outlets in the UK and France would highlight the drain that the common man in the UK suffers on his daily grocery purchase. The announcement by the Monopolies and Mergers commission to investigate the "excess profitability" in the grocery sector does not seem to have had any impact and the price difference continues to widen.

The Office of Fair Trading (OFT) has sent a written warning to 25 retailers across the UK that the MMC would soon be investigating their business dealings and high profits. Leading brands like Tesco, Sainsbury, ASDA and Safeway would be among the stores whose pricing would be under scrutiny by the State body although Mark & Spencer's surprisingly do not seem to figure in the list of erring stores. John Bridgman the Director General of OFT confirmed that he had collated evidence of excess profiting in the grocery sector and an inquiry would be conducted into the relationship between super markets and their suppliers among other things.

Preliminary enquiries with the major whole sale suppliers reveal that retailers make a killing by marking up prices on milk and poultry by more than one third, a 40% mark up on fresh fruits, vegetables and eggs, the highest mark up of 50% being on exotic fruits, organic products, instant coffee, prepared and continental meals. Suppliers also accused that these big retailers arm twisted them into giving huge discounts which they did not pass over to the consumers and pocketed themselves. Ironically Tesco and Sainsbury's claims of having earned pre tax earnings of more than 1.5 billion dollars between them have given authorities a strong reason to bring them under the scanner. Small retailers have joined bigger players like ASDA and Safeway in queering the pitch of profiteering and bringing disrepute to the retail segment on Tesco and Sainsbury the two giant retailers who are believed to account for 39% of the entire grocery business in the UK. The OFT is convinced that these stores were making profits far disproportionate to their investments as a result of their 'super normal profits"

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