Sainsbury's Stunned As Tesco Wins ASA Battle

Tesco will next week score a victory over one of its bitterest rivals when advertising regulators reject a complaint from J Sainsbury that sparked a war of words between the two companies.

Sky News can reveal that the Advertising Standards Authority (ASA) will on Wednesday dismiss Sainsbury's challenge to a series of Tesco advertisements which claimed that its own-label products were cheaper than those of its competitors.

The ruling will deliver a blow to Sainsbury's and its chief executive, Justin King, who was publicly critical of Tesco's marketing campaign, arguing that it misled millions of British shoppers.

The ASA has been investigating the complaint for nearly four months and is understood to have taken detailed legal advice about the merits of Sainsbury's case, repeatedly seeking new information from both companies during the process.

The regulator's ruling will mark a temporary ceasefire in one of the angriest disputes between the two chains for many years.

Tesco's victory is, though, likely to spark a renewed advertising conflict between the two chains, which spend tens of millions of pounds each year promoting themselves on television, in newspapers, online and on billboards.

Britain's biggest retailer is expected to run ads after the ruling emerges next week.

Sainsbury's complaint to the ASA centred on separate advertising campaigns being run simultaneously by Tesco, one of which focused on the importance of the provenance of its food products in the wake of this year's horsemeat scandal.

Tesco found itself at the centre of the contamination crisis, with some of its products containing large quantities of horsemeat, leading Philip Clarke, its chief executive, to pledge an overhaul of its supply chain.

Sainsbury's is said to have argued that it was dishonest of Tesco to claim that provenance was crucial to customers' food preferences and at the same time run another marketing blitz comparing the own-label products of different supermarket chains.

The latter campaign, called Price Promise and which involved Tesco issuing money-off vouchers after comparing rivals' prices without taking account of sourcing or ethical credentials, caused controversy throughout the grocery retailing sector, with Wm Morrison also threatening to lodge an ASA complaint.

Mr King's chain prides itself on the ethical sourcing and high-quality nature of its own-brand products, making it invidious, Sainsbury's argued, for Tesco to compare them with its own lower-quality ranges.

The ASA is now expected to judge that the campaigns were separate and that it was therefore legitimate for Tesco to compare own-label products that were not entirely alike.

"We have exhausted everything we could with them [Tesco], so were left with no choice but to go to the ASA," Mr King said in May.

"You can't have advertising saying that where your chicken comes from is important, while at the same time still sourcing your chicken from Thailand and Brazil, and then doing a price comparison with Sainsbury's chicken, which is sourced from the UK. That is inherently unfair."

It is unclear whether Sainsbury's plans to appeal against the ASA's ruling. The regulator does allow complainants to challenge its adjudications although it rarely overturns them.