20 Sep 2007


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Supermarkets and dairies accused of price fixing

Asda

Morrisons

Safeway

Sainsburys

Tesco

Arla

Dairy Crest

Lactalis McLelland

The Cheese Company

Wiseman

milk

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Morrisons denies any dairy price fixing 20 Sep 2007

The country's four largest supermarkets and a number of dairy processors have colluded to increase the prices of dairy products and cost consumers £270m, according to the Office of Fair Trading

The consumer watchdog has issued a statement of objections, setting out its provisional findings, to Asda, Morrisons, Sainsbury and Tesco, as well as dairy processors Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman.

The provisional finding is that the supermarkets and dairy processors engaged in fixing the retail prices for milk, butter and cheese, in breach of the Competition Act, by sharing highly commercially sensitive information, including details of the levels of price increases during 2002 and 2003.

The OFT has provisionally found that this practice was harmful to consumers by restricting the competitive process, leading to higher prices. The OFT also believes that the parties understood their actions might be anti-competitive and in fact retailers were previously warned of this by the OFT.

Sean Williams, OFT executive director, said: “This is a very serious case. We believe supermarkets have been colluding to put up the price of dairy products. Consumers have lost out to the tune of hundreds of millions of pounds. This kind of collusion on price is a very serious breach of the law. Businesses should understand that where we find evidence of this kind of anti-competitive activity we will use the powers at our disposal to punish the companies involved and to deter other businesses from taking such actions.”

The OFT stated it would not be in a position to decide if the law has been breached until it has received and reviewed the parties' responses to the statement of objections and any comments from interested third parties.

Morrisons has denied any involvement in the alleged price fixing.

Dairy producer Robert Wiseman said the OFT would not be in a position to decide if the law has been breached until it has received and reviewed the parties' responses.

“We look forward to reviewing the detail within the statement of objections, and to defending our position,” it said in a statement.

The OFT claims prices were fixed, costing consumer £270m

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Anonymous	20 Sep 2007 14:01:33
All forms of price fixing effect many parties the end consumer and other competitors outside of the group alleged to be price fixing, market sharing , or controlling supply and contract rigging.; in this example price fixing. Once again, it looks like the Independent Retailer has suffered consequently. The consequence likely to be higher purchase cost prices & lower profit margins to compete for the basic commodity milk The Independent Retailers and consumers have suffered from these activities, whereby the Independents market share & profitability is reduced which in turn reduce their ability to refurbish, staff at levels to offer better customer service and to offer the consumer wider choice. Those who participate in such activities must definitely be made examples of, last years Virgin & British airways was another example. Those that whistle blow must be commended and those that participate punished.

Jonathan James	21 Sep 2007 14:13:39
This story should act as a crystal ball to consumers.When the big four get together they can command their price.Thats in todays market where there is competition.With small shops closing at the current rate and thus far less competition, Im sure it wont just be dairy products that they "fix" the price on.Estimates of £270million cost to the consumer will be nothing compared to what they end up paying when they ramp up the price on everything.Hope the Competition Commission have read the story!!