Supermarkets forced to hand over 'bullying' emails sent to suppliers

Producers allegedly received threatening and abusive emails and telephone calls in an attempt to force them to foot the bill for the recent price war between the country's two biggest store chains.

Tesco and Asda have such financial muscle they can use the implied threat of dropping suppliers to push them into accepting terms which slash profit margin to zero and beyond.

Although such methods are outlawed under a supermarket industry code of practice, it is suggested farmers and other suppliers are so scared of losing contracts that they often do not complain.

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Anthony Gibson, communications chief at the National Farmers' Union, said: "Whenever supermarkets get involved in price wars, it is always the supplier - the weakest player in the food chain - who ultimately pays.

"Farmers are making huge losses at the moment and if the supermarkets carry on the way they are, they will have no supply chain left."

The Competition Commission is investigating whether the store giants' growing dominance is harming shoppers and suppliers.

It has ordered Tesco and Asda to hand over all emails sent to suppliers during one period earlier this summer to establish whether unfair pressure was used.

The inquiry is also looking at a number of other dirty tactics, including:

• Below-cost selling of key items, such as alcohol, bread, bananas and petrol, to tempt shoppers from rivals;

• Buying up vast land banks to prevent competitors from opening stores in the same area;

• Using financial muscle to demand discounts from suppliers which are not available to others, such as corner shops.

A spokesman for the Competition Commission confirmed legal notices had been served on Tesco and Asda to gain access to emails and other correspondence.

He said this would allow the watchdog "to investigate more thoroughly".

The supermarkets insist they have nothing to hide, however.

A spokesman for Asda, which is based in Leeds, said yesterday: 'We adhere to the code of conduct between suppliers and supermarkets.

"During the period which the commission want to see our correspondence, there were about 11million emails to suppliers. But we are happy to help and we have absolutely nothing to hide."

A spokesman for Hertfordshire-based Tesco said: "We have nothing to hide and are doing what we can to assist the commission with this enormous data request.

"We expect the commission to conclude that at Tesco, relationships with suppliers are professional and act to the ultimate benefit of the customer."