Supermarkets 'milking' customers
Thursday, 20 Sep 2007 13:52
Supermarkets are accused of fixing milk prices
Several leading British supermarkets and dairy processors have been accused of colluding to keep the price of milk and other products artificially high.
The Office of Fair Trading (OFT) said it had provisionally found that Asda, Morrisons, Safeway, Sainsbury and Tesco had fixed the price of milk, butter and cheese.
Dairy processors Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman are also accused of the anti-competitive behaviour, which is estimated to have cost consumers around £270 million.
As a result of its investigations the OFT has provisionally concluded that the supermarkets and dairy processors fixed the price of produce by sharing commercially sensitive information, including details of price increases.
The consumer watchdog claims that the price-fixing activities took place over a two-year period between 2002 and 2003.
OFT officials say the regulator will not be in a position to conclusively determine whether competition law has been breached until the parties involved have responded to its initial findings.
However OFT senior director Sonya Branch said that the accused could face "significant penalties" if ultimately found guilty of breaking the Competition Act 1998. She added that such penalties could total "several hundred millions" of pounds.
OFT executive director Sean Williams said: "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 says that its probe was launched in 2004, following several complaints and evidence uncovered in separate investigations.
A spokesman for Tesco, the UK's biggest retailer, said that the supermarket chain would "vigorously defend" allegations that it had not acted in the best interests of consumers.