Sainsbury’s loses appeal over Tesco's Price Promise

J Sainsbury has lost a High Court battle with bitter rival Tesco over a public pledge to match the price of fresh and own-brand food.

Sainsbury’s had pressed for a judicial review of Tesco’s Price Promise campaign after claiming it was misleading, unfair and unlawful to compare the price of products from different origins and with different ingredients.

The company challenged a decision by Sir Hayden Philips, an independent reviewer for the Advertising Standards Authority (ASA), who had cleared the Tesco scheme.

However, Mr Justice Wilkie, sitting at London’s High Court, dismissed Sainsbury’s complaints about Sir Hayden’s approach. The judge ruled there were no grounds for saying Sir Hayden had gone wrong in law.

The judgment is a setback for Mike Coupe, the new chief executive of Sainsbury’s, who launched the legal challenge last year. He claimed that comparing the price of own-branded products did not take in account the quality of ingredients or whether it was certified as Fairtrade.

A spokesman for Sainsbury’s said the company will “consider all our options”.

However, Robin Terrell, managing director for Tesco UK, said he was “really pleased with the ruling”.

In an email to staff, he said: “We’re really pleased that the court has taken this decision.

“We prefer talking to our customers rather than about the competition, so you won’t hear us talking about this much publicly, but we should all be clear what it means. We know that at least nine out of 10 customers’ Price Promise baskets are cheaper than Sainsbury’s, and on the other one, we make up the difference.

“What’s more, an important part of Sainsbury’s case against Price Promise was about our supply chain. At Tesco, we work incredibly hard with our suppliers to raise standards and to be able to deliver great products to our customers.

“We’re really proud of the work we do – not least through the efforts of our 45 labour standards experts working around the world.”

Price Promise offers shoppers money-off vouchers if a customer’s basket of goods would have been cheaper in a rival supermarket. It covers branded food, but also fresh food and own-brand products. Sainsbury’s version of the scheme, Brand Match, only covers branded goods. Products at the centre of the dispute included bottled water, eggs, chicken korma, cod fillets, ham and tea bags.

In a statement, Sainsbury’s said: “We are disappointed by today’s outcome and we will consider all our options.

“Whilst we respect the court’s decision that the Independent Reviewer acted lawfully when adjudicating our complaint against Tesco, we continue to believe that it is fundamentally misleading for customers if price comparison schemes are inconsistent in taking into account provenance, quality and whether products are Fairtrade or sustainably sourced.

“These values continue to be at the heart of our business and it will be for customers to reach their own verdict on this issue.”