PRESS DIGEST - Financial Times - May 1

STORES RESIST PLAN FOR OMBUDSMAN

Supermarkets resisted the Competition Commission's plan for an independent ombudsman to police a tighter supermarkets' code of practice, with Lucy Neville-Rolfe, corporate and legal affairs director at Tesco(TSCO.L), stating, "Our instinct is to be doubtful about the ombudsman. We want to talk to them to see what can be achieved in other ways." The proposal represented one of four moderate recommendations put forward by the commission following its third enquiry since 2000 into the 120 billion pounds-a-year grocery market. The commission also recommended that local authorities use a "competition test" when assessing planning application to make certain of a larger choice for shoppers. In view of the concerns of supermarket chains over the plans for an ombudsman to police dealings between the grocers and suppliers, it now appears that the commission's plans for an ombudsman to be in place by October may be optimistic.

MEDICINE PRICING DEAL WEEKS AWAY, INDUSTRY FORECASTS

The president of the Association of the British Pharmaceutical Industry, Nigel Brooksby, has told the Financial Times that he was "optimistic" about reaching a fresh voluntary agreement on medicine pricing with the government. The news comes on the back of the announcement late last year by the Department of Health of its intention to cancel the Pharmaceutical Price Regulation System only two-and-a- half years into its operation. The industry was displeased by the government's demands for a cut of up to ten percent, on top of a seven percent cut in 2005, in the average price of patented medicines. Referring to the "dent in confidence" as a result of the government's decision to unilaterally scrap the pricing contract, Mr Brooksby called for removing "this dark cloud" of a lack of confidence between the government and industry.

AIRLINES TO SEEK DAMAGES OVER T4 DELAYS

Citing the months-long delay in the planned transfer to Terminal 4 at Heathrow, due to the decision of British Airways(BAY.L) to postpone its own move of long-haul flights from Terminal 4 to Terminal 5, the SkyTeam global airlines alliance is seeking financial compensation from the airports operator, BAA. "We are very unhappy and disappointed at the latest developments at Heathrow," said Giorgio Callegari, chairman of SkyTeam's airport infrastructure group. The news comes as the latest consumer report published on Wednesday by the Association of European Airlines revealed that British Airways had the worst record among European carriers for flight delays and misplaced bags in the first three months of the year.

ABBEY CUTS SOME MORTGAGE RATES

The Santander(SAN.MC) owned mortgage lender Abby said it would reduce rates on its flexible and tracker mortgages for new customers by ten basis points from the end of the week. Two-year fixed-rate deals for borrowers who have 25 percent deposit will by reduced by 11 basis points, while rates on other fixed-rate products at higher loan-to-value ratios are being held or slightly increased. "Whilst the mortgage market remains challenging, Abbey are pleased to be in a position to improve some rates available to our customers," said the bank, while confirming that the moves were in response to the Bank of England's 50 billion pound cash injection into the mortgage market.

BAT CASTS ITS GAZE TO AFRICA

British American Tobacco(BATS.L) said on Wednesday that it is continuing to study acquisition opportunities, particularly in Egypt and Algeria. Having made two acquisitions within six days in February, the company said that it would be interested if either country was to offer for sale their state-owned tobacco companies. Chief executive Paul Adams told the AGM on Wednesday that he also saw one or two possible opportunities in the Asia-Pacific region. "With the consolidation of the industry, any potential acquisitions are likely to be small to medium-sized businesses," he said.