OFT chief executive John Fingleton has delivered a stinging blow to the UK’s supermarket suppliers.

As the Competition Commission launches its latest inquiry into the nation’s £95 billion grocery retailing industry, Fingleton’s inflammatory comments made it clear his office is happy to see smaller suppliers squeezed out of the equation, if savings are passed on to consumers.

Talking to Financial Mail, he admitted he would be prepared to watch suppliers suffer, and would not support the idea that the code of conduct, which is supposed to govern complaints made by suppliers against supermarkets, should be rigorously policed.

“It is not good for consumers to protect the suppliers - and our job is to protect consumers,” he said.

He supported aggressive tactics and paying suppliers less as legitimate methods of creating value. “Suppliers might like to keep prices higher,” said Fingleton. “But the market should be led by what consumers want - not by bureaucratic decision-making. It would be ridiculous to keep prices artificially high to placate suppliers. There are always winners and losers. If one company goes out of business, there will soon be another to take its place.”

FPJ commented last week that it is time supplier issues were brought to the table. Suppliers have claimed they are forced to cut prices, to accept longer payment terms, to contribute towards special promotions and, in some cases, make donations to the supermarkets’ favourite charities.

But Fingleton’s remarks appear to quash any outside chance of suppliers’ struggles being taken into account and back up suppliers’ fears outlined in the results on this week’s freshinfo poll - see below.

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