A SUPERMARKET price war is looming across Gwent and South Wales after Danish operator Netto said it will open 70 new stores.

The investment is worth over 200 million and will create 1,700 jobs.

Netto undercuts the prices of the big four UK supermarket operators.

It claims it can do this by ruthless cost control rather than by compromising on quality.

The stores sell around 1,100 products, mixing own-brands with famous names.

Although little-known in South Wales, there are about 800 Netto outlets around Europe, of which 135 are in the UK.

Two of them are in North Wales at Flint and Holyhead.

A Netto spokesman said they would be prominently located along the M4 corridor from the Severn Bridge to Haverfordwest and up as far as the Heads of the Valleys Road (A465).

Claus Waedeled, Netto UK's managing director, said: "Our experience in Flint and Holyhead has convinced us that there is ample room for further expansion in the Principality.

"Like the Danes, the Welsh understand the benefits of value retailing and that's reflected in the sales we enjoy in our existing stores.

"We are now actively looking at a wide range of sites in South Wales and expect to invest more than 200m in the region."

The firm spent most of 2004 searching for suitable locations but will not reveal them until planning is approved by the councils concerned.