ISP calls in FSA and OFT as 60m coupon row erupts

Mutton%202

Edwin Mutton, director-general of the Institute of Sales Promotion (ISP), has accused the UK’s biggest grocers of costing suppliers up to £60m a year by accepting money-off coupons without selling their products.

Launching a stinging attack on retailers such as Tesco and Sainsbury’s – currently ranked first and third in terms of UK market share – Mutton claimed all retailers "are at it" and manufacturers have been "too scared to put their heads above the parapet" for fear of products being delisted.

The ISP’s coupon council, consisting of manufacturers, newspaper publishers, coupon houses and other technical representatives, plans to lobby the authorities to investigate.

Mutton claims: "About 50% of coupons aren’t properly redeemed. Ask firms like Tesco their policy and they say as long as they stock the product, they will accept the coupon, whether or not the consumer has bought it.

"It is costing the industry between £50m and £60m every year and is destroying couponing as a promotions technique."

Mutton adds: "It is morally wrong. By way of example, Sainsbury’s and Tesco ask to be reimbursed by the manufacturers. All [the retailers] are at it. These firms are doing something that is financially improper. It is unclear whether it is fraud, but a coupon is as good as a cheque."

The ISP will approach the Financial Services Authority about the issue. Mutton says a presentation has already been made to the Office of Fair Trading, which earlier this year referred the UK grocery sector to the Competition Commission. It will investigate claims that companies are distorting competition and harming consumers.

A Sainsbury’s spokeswoman says: "Customers must buy the appropriate product to qualify to redeem a coupon and we train our colleagues accordingly."

No one at Tesco was available for comment.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here