The Competition Commission has reached a provisional decision that supermarkets operate two complex monopolies in pricing groceries and in their relations with suppliers.

The view has been sent to supermarkets for their comments. The commission said this morning it has held 35 hearings with third parties and received over 200 submissions. It has also received information from nearly 400 supermarket suppliers and 50 local authorities.

Tesco was the first supermarket to welcome the statement, which it said showed that there is 'no real evidence of excessive profitability'. It pointed out that prices have fallen in real terms in the UK and that the trend was better than in a number of comparable European countries.

Claiming high levels of satisfaction among consumers, it added: 'The emergence of internet and home shopping should have further beneficial effects on the competitive situation.'

The commission emphasised that no conclusions have been reached. The next step will be hearings in March and the commission particularly wants to hold sessions with Asda, Safeway, Sainsbury's, Tesco and Morrisons.

The statement says: 'There are a number of matters that the commission needs to explore further with the supermarkets before it can decide what, if anything, needs to be done.'

Supermarket shares reacted favourably this morning. Tesco added 4.75p to 168p, Sainsbury's 2.5p to 342.5p, Morrisons 5.5p to 133p and Safeway 5.75p to 207p.