UK supermarkets face possible probe over pricing practices

By Neil Maidment

LONDON, April 21 (Reuters) - Britain's embattled supermarkets face a possible probe by competition regulators after UK consumer watchdog Which? demanded an investigation into grocers' pricing practices.

Which? said on Tuesday it had made a "super-complaint" to the Competition and Markets Authority (CMA) after identifying "misleading and confusing" pricing tactics over seven years in areas such as multi-buy offers, at the likes of Tesco and Asda (part of Wal-Mart Stores Inc ).

Which?, which has called for voluntary change by the retailers, said many supermarkets were creating the illusion of savings that did not exist. Around 40 percent of groceries in Britain are currently sold on promotion.

"Shoppers think they're getting a bargain but in reality it's impossible for any consumer to know if they're genuinely getting a fair deal," Which? Executive director Richard Lloyd said in a statement. "We're saying enough is enough."

The UK's "big four", Tesco (Xetra: 852647 - news) , Asda, Sainsbury and Morrison, have become embroiled in a price war as they battle to hold on to sales being lost to increasing popular German discounters Aldi and Lidl, whose cheap, no-frills offers have struck a cord with recession-hardened Britons.

Both Tesco and Sainsbury have said they will reduce promotions and improve customer service to win back shoppers.

Examples of confusing offers cited by Which? included pizzas priced at 1.50 pounds ($2) at Asda being increased to 2 pounds as they went onto a multi-buy two for 3 pounds offer.

Which? has legal powers that enable it to file super-complaints with the CMA. The regulator has 90 days to respond.

($1 = 0.6728 pounds) (Editing by David Holmes)