Multiples must hand over e-mails

The Competition Commission has demanded to see copies of e-mails between Tesco and Asda and their suppliers as part of its investigation into the grocery market.

The Commission issued both supermarkets with Section 109 notices, which override confidentiality issues, as it looked into retrospective payment demands.

A spokesman for the competition watchdog would not confirm if e-mails between the supermarkets and alcohol suppliers were among those being looked at, but said the enquiries were "certainly not limited to one sector".

Both Tesco and Asda said they observed the supply code of practice, but would co-operate fully with the inquiry.

A spokeswoman for Asda said the company had asked the Commission to be more specific so it would not have to send all 11 million e-mails through.

ACS chief executive James Lowman welcomed the move. "We have consistently maintained that the Competition Commission has to get to the bottom of the relationship between the supermarkets and their suppliers. We welcome this move as a clear indication that the Commission is being thorough in its evidence gathering," he said.

A survey by food industry adviser Grant Thornton showed almost 80 per cent of suppliers have been subjected to supermarket pressure to drop their prices and nearly 60 per cent of suppliers do not set up notice periods for supply agreements with supermarkets.