British competition watchdog probes retail price fixing. As the ACCC grinds through private hearings and hundreds of pages of submissions, looking at the Australian supermarket industry and whether there’s competition, its counterpart in Britain appear to have launched their biggest ever investigation into retail price fixing. Last Thursday, the headquarters of Britain’s four biggest supermarket chains were raided by Britain’s consumer watchdog, the Office of Fair Trading (OFT), as part of an investigation into price-fixing. Tesco, Sainsbury’s, Asda and Morrisons are being probed over allegations of colluding to fix the prices of groceries and health and beauty products. It’s the latest in at least four major inquiries into price fixing and competition issues in the UK supermarket industry, which has provided many ideas for local retailers over the years. The probe has widened in the past day or so with some of the biggest consumer goods companies in the world becoming targets for the OFT’s investigation. The media reports say the OFT has asked companies including Proctor and Gamble, Unilever and Mars for price data on groceries and other products. News of the raids comes only days after the OFT released a report claiming price fixing between 2000 and 2003 in the $A21 billion a year cigarette market in Britain. The major four supermarkets are among 11 retailers caught up in the cigarettes inquiry. Later this week the OFT will publish the results of a separate two-year investigation into the grocery market. That report will be studied by the ACCC for background in its current inquiry. — Glenn Dyer
Buffett warns US recession will be tougher than expected. Warren Buffett reckons the US economy is already in recession and ordinary Americans are being hammered. Speaking on CNBC after his company, Berkshire Hathaway, agreed to invest $US6.5 billion in the Mars Group’s $US23 billion takeover of Wrigley, Buffett said he saw the recession as being more severe than most people expect:
I think it’s defined by the man in the street a little differently than whether there’s been two quarters of reported (negative) GDP growth.
We’re in a recession, unless you want to stick strictly to the technical definition, which I think really doesn’t have much meaning to the fellow who has lost his job or is facing a money market fund that isn’t paying him out or whatever it may be.
… This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think. This will not be short and shallow.
I think consumers are feeling gas and food prices, and not feeling they’ve got a lot of money for other things.
He also said he saw no respite from the housing slump, “I think this is going to be fairly long and fairly deep, but who knows”. Buffett’s company has its annual meeting in Omaha this weekend and his comments came two days ahead of the US Commerce Department’s release of its first estimate for first quarter economic growth. Economists are tipping a growth rate of 0.2%, compared to 0.6% in the December quarter, but they say the estimate will overstate domestic activity and result from strong exports.
Kerry Stokes flashes the Monet. Kerry Stokes failure to get representation on the board of West Australian Newspapers last week was a blow to his standing as one of Australia’s richest men. Just how rich can be seen from the current Turner to Monet landscape exhibition at the National Gallery in Canberra, where Stokes is a former chairman and a long time supporter. He lent two paintings by Monet — Waterloo Bridge and The Pointe de l’Ailly, low tide — to the exhibition, plus painting by Paul Serusier (Mother And Child in a Breton Landscape) and Gustave Courbet (Low tide, the beach at Trouville). No idea of the value, but certainly in the tens of millions of dollars in the current art market. Stokes’ generosity is a casual example of his undoubted wealth, and makes you wonder if our other wealthy types, such as James Packer, Dick Pratt, the Lowys and Twiggy Forest, have similar art collections. The Fairfaxes do, but they are no longer as wealthy as Stokes, Packer, Pratt, Lowy etc. — Glenn Dyer