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Asda's pounds 30m cuts in new price war

Eileen Murphy
Monday 09 August 1999 23:02 BST
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SUPERMARKETS CUT the price of hundreds of products yesterday as the Government warned that firms found to be fixing prices will face massive fines.

Asda, which has been at the forefront of this year's price cuts by the big retailers, announced it was taking another pounds 30m off prices. The 600 price cuts will include 100 top brands. Asda, the third largest supermarket chain, is introducing an aggressive pricing policy two months after the group's pounds 6.7bn takeover by the American chain Wal- Mart.

Safeway responded by announcing, as part of a pounds 30m price cut campaign, a reduction in the cost of every pack of frozen chips by 20 per cent - up to 50p a packet.

The market leader, Tesco, promised not only to match its competitors but "do better", and to continue publishing prices on the Internet.

A Sainsbury's spokeswoman said the chain would carry on cutting prices and would "be providing value for shoppers through methods such as multi- buys and reward card points".

Stephen Byers, the Secretary of State for Trade and Industry, said companies engaging in anti-competitive practices would face a maximum penalty of 10 per cent of their UK turnover every year for up to three years. The move follows concern that consumers are paying more for some goods than buyers in the United States and other European countries.

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