Unit 3: Supermarkets investigated by the CMA

Thank you to Luke for this excellent article on supermarkets. The competition regulator is to scrutinise allegations that UK supermarkets have duped shoppers out of hundreds of millions of pounds through misleading pricing tactics.

A classic example of powerful firms exploiting the consumers lack of knowledge (asymmetric information).

Take time to look at what the CMA intends to do about it. It highlights to me one of the evaluative points you can make about regulations....it takes forever! In the meantime, the supermarkets can go on exploiting consumers, or decide not to whilst the investigation is ongoing, therefore avoiding fines, leaving them open to continue exploitation in the future!

The article also highlights the issue of monopsony power in the supermarket industry, with 1400 suppliers facing bankrupcy!