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Monday, June 14, 1999 Published at 12:16 GMT 13:16 UK

Business: The Company File

The Trojan Wal-Mart

Wal-Mart's takeover of Asda will change the way supermarkets do business in the UK, but as Rodney Smith explains consumers may find that the deal could have an unexpected side-effect on what's on their dinner plates.

Speculation can be dangerous, and highly inaccurate - but it is the very lifeblood of the financial community.

The fact that US pile-em-high-sell-em-cheap supermarket chain Wal-Mart is buying into the UK market by snapping up Asda, has set the minds of the investing community racing.

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The appeal for the Americans was huge; the UK food retailing market is dominated by a few big names now facing a government investigation about pricing.

This creates fertile territory for an aggressive and cost-conscious US chain which specialises in pampering consumers in only one way - with low prices.

Meanwhile, more and more British supermarket groups are bowing to perceptions of public opinion and deciding not to stock their shelves with food containing genetically modified - and therefore cheap - components.

Significantly, Asda has been the odd one out, one of the few UK supermarkets that has held out against the trend to stock 'green' produce like organic foods.

GM food is a touchy subject with US manufacturers, of which Monsanto is the biggest, but not yet a world trade issue.

This could yet reach the tempo of the two food rows which already separate the EU and the US at the WTO - the banana and hormone treated beef disputes. Both have taken around 10 years to reach their present sub-fever pitch.

However - unlike the beef ban, there is no formal EU or UK ban yet on GM foods.

It is a racing certainty that America's biggest supermarket chain already stocks its shelves with GM derived or associated foods.

One of the keys to its commercial success in Europe will be access to cheap US food supplies; rather as the German chain Lidl already does with some of its food products in the UK.

So what are Monsanto, Wal-Mart and the other hugely powerful US business interests connected with the food production and retailing business planning?

That Wal-Mart becomes their Trojan Horse, and gives UK, and eventually other European consumers the choice they feel they deserve; GM altered foods, and eventually, possibly, hormone treated beef?

Still, it's only speculation.

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