The UK Competition Commission is about to deliver its much-awaited report into supermarket prices to the Department of Trade and Industry.

Despite months of claims that UK shoppers pay much more for their groceries than consumers in other EU countries, the commission is not expected to be very critical of the country's five big supermarket chains.

During its 18-months-long investigation into the �60bn-a-year industry, the commission had already stated that it found "only limited evidence of excessive profitability" in the industry.

Retailers argue that any price differences are the result of higher customer service levels and expensive floor space.

Shopping around

The commission's report is expected to focus on two areas, the pricing of groceries and how supermarkets deal with their suppliers.

Grocery chains could be told to stop abusing their buying power when dealing with farmers and other suppliers.

The commission could force major supermarkets to post their prices on the internet, so that consumers can shop around for the best deals.

The commission is also expected to urge the government to set up a system whereby the big supermarkets send detailed accounts of their profit margins to competition watchdogs every six months.

'Unrealistic' proposals

The demands come as the big supermarkets - Tesco, Sainsbury's, Safeway, Asda, Somerfield and Morrisons - are already engaged in so-called 'price wars' on food and, more recently, petrol.

Supermarket chiefs have said the commission's demands are unworkable, as it would mean posting tens of thousands of product prices on a daily basis.

They say the proposals to reveal their profit details are equally unrealistic.

Under the proposals, the stores would be required to deliver both cost price and retail price details for every single product line.

In February, an interim report into supermarket prices found there was some evidence that supermarkets might be abusing their monopoly power.

At that time, the Competition Commission said food was getting cheaper in real terms, although it felt price competition was based on just a small number of items.

The report had originally been due in April, but Trade and Industry Secretary Stephen Byers granted an extension because of the "wide-ranging" nature of the inquiry.

Supermarkets under threat

The report from the Competition Commission coincides with research suggesting that three of the UK's top five supermarket chains could disappear within the next five years.

According to a study by retail analysts Verdict Research, competition from foreign firms like WalMart could drive many store chains out of business.

Among those who could lose their independence are Somerfield, struggling since it bought and failed to integrate Kwik Save, Safeway and even the UK's former number one, Sainsbury's.

WalMart, the world's largest retailer, recently bought Asda, and has begun a programme of cost-cutting that has upset the grocery retailing landscape.