CMA to investigate possible ‘weakening of competition’ in food and fuel prices

Supermarkets are facing a new investigation into record-high prices for food and drink, after Britain’s regulator accused them of stalling its existing probe into the cost of fuel. The Competition and Markets Authority said it had no evidence of specific concerns “at this stage” but that it was “important to be sure that weak competition is not adding to the problems.” “Given ongoing concerns about high prices, we are announcing the stepping up of our work in the grocery sector to understand whether any failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market,” it said. Liberal Democrat leader Ed Davey welcomed the probe and said the Tory ministers had failed to act to “bring down food prices”. However, the CMA said it will now assess how competition is working overall in the grocery retail market, and identify which product categories, if any, “might merit closer examination across the supply chain”. But, given ongoing concerns about high prices, we are stepping up our work in the grocery sector to help ensure competition is working well and people can exercise choice with confidence.” The watchdog also issued an update on its investigation into petrol and diesel prices, saying there are indications higher pump prices could not be attributed solely to global concerns and “appear in part to reflect some weakening of competition in the road fuel retail market.” Evidence indicated that fuel margins had increased in particular for supermarkets over the past four years, with average 2022 supermarket pump prices appearing to be around 5p per litre more expensive than they would have been had their average percentage margins remained at 2019 levels.