Watchdog to investigate if supermarkets are overcharging shoppers for food and fuel

Supermarkets are being investigated by the government over whether they are to blame for increasing food and fuel prices.

The Competition and Markets Authority (CMA), the government’s anti-monopolies watchdog, found supermarkets are charging an extra 5p per litre on petrol and diesel after accounting for factors like the Russian invasion of Ukraine.

The CMA said that “global factors” are behind “many of the grocery price increases” but it has seen “no evidence at this stage of specific competition problems”. It added that it would look at whether a "failure in competition" meant customers were overpaying.

The watchdog has announced a probe into grocery prices and its findings are likely to fuel claims that big companies are profiting off the cost-of-living crisis via ‘greedflation’.

The CMA said that average 2022 supermarket pump prices “appear to be around 5 pence per litre more expensive than they would have been had their average percentage margins remained at 2019 levels”.

It said evidence suggested at least one supermarket had set a higher target for its margin on fuel prices last year which could have led to other stores following suit and raising prices too.

On road fuels, the CMA added that Russia’s invasion of Ukraine may be the largest factor behind price rises, but higher prices “cannot be attributed solely to factors outside the control of the retailers”.

It said drivers paying higher prices “appear in part to reflect some weakening of competition in the road fuel retail market” and supermarkets had not been “sufficiently forthcoming with the evidence they have provided” during the investigation.

Sarah Cardell, Chief Executive of the CMA, said due to “ongoing concerns about high prices” the watchdog is “stepping up” its work to ensure “competition is working well and people can exercise choice with confidence.”

She added that supermarket bosses would be called in for formal interviews to "get to the bottom of what is going on".

Asda NationalWorld it would work "in full-cooperation" with the CMA and said it was "focused on providing our customers with the best value at the pumps".

Andrew Opie, director of food and sustainability at the BRC, also said supermarkets were "confident" that they were "doing all they can to keep food prices as low as possible".