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

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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.

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