By unlocking the export potential China offers the pig industry, not to mention the red meat sector as a whole, we could gain entry into a marketplace which comprises a fifth of the world’s population.OFT fines dairy companies and supermarkets £50m
FOUR supermarkets and five dairy processors have been fined almost £50m by the Office of Fair Trading.
The OFT said it had found Arla, Asda, Dairy Crest, McLelland, Safeway, Sainsbury’s, Tesco, The Cheese Company and Wiseman infringed the Competition Act 1998 by co-ordinating increases in the prices consumers paid for certain dairy products in 2002 and / or 2003.
“This co-ordination was achieved by supermarkets indirectly exchanging retail pricing intentions with each other via the dairy processors - so called A-B-C information exchanges,” says a statement.
The long running investigation found that three infringements were committed. Not all companies were involved in all three.
- Cheese in 2002 - involving Asda, Dairy Crest, Lactalis McLelland (prior to its acquisition by Groupe Lactalis), Safeway (prior to its acquisition by Morrisons), Sainsbury’s, Tesco and The Cheese Company
- Cheese in 2003 - involving Asda, Lactalis McLelland (prior to its acquisition by Groupe Lactalis), Sainsbury’s and Tesco and
- Fresh Liquid Milk in 2003 - involving Arla, Asda, Dairy Crest, Safeway (prior to its acquisition by Morrisons), Sainsbury’s and Wiseman.
Arla benefitted from complete immunity from fines as it applied for and was granted immunity under the OFT’s leniency programme. Arla was the first company to alert the OFT to the existence of possible infringements and the first to apply for leniency.
Asda, Dairy Crest, McLelland, Safeway, Sainsbury’s, The Cheese Company and Wiseman received reductions in their fines because they agreed to early resolution. Each of these parties admitted liability for the infringements and agreed to a streamlined procedure enabling parts of the case to be resolved more quickly, thus reducing the costs of the investigation.
Following the imposition of the £49.51m fines OFT chief executive John Fingleton has warned supermarkets, suppliers and other businesses that – “the OFT will take action and impose significant fines where it uncovers anti-competitive behaviour aimed at increasing the prices paid by consumers.”
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Readers' comments (24)
Martyn Bedford | 10 August 2011 10:11 am
Lets see some of this money put back into the industry to repair some of the damage done by the supermarkets and others.
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Adam Davies | 10 August 2011 10:18 am
Well done Arla. Takes some b*lls to whistleblow when you're in the business.
Agree with Martyn, OFT have a moral obligation to return this money to the dairy industry before the treasury get their mucky hands on it.
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John Wayne | 10 August 2011 10:22 am
What did Tesco's get . Well how about 30ppl for all dairy farmers now that we can see what a bunch of crooks the processors and retailers really are
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Anonymous | 10 August 2011 10:24 am
This money should go back to the producers of the milk etc. For too long they've had to endure low prices and many have left dairy farming because the prices were below the costs of production. A national disgrace - especially when the sellers then import the product from other countries!
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Anonymous | 10 August 2011 10:30 am
Well that goes some way to covering the cost of a badger cull!, but I expect they'll appeal and get the fine reduced. Then someone will say its the consumer who lost out...and on and on...
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Anonymous | 10 August 2011 10:33 am
The price we receive for our milk is a disgrace. The market place clearly doesnot work and supermarkets feel free to sell milk as a loss leader and to make ever increasing profits on the backs of dairy farmers.
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Tom Rutherford | 10 August 2011 10:49 am
Give this money straight back to the farmers who produce the milk.Even compensate some for having to get out of milk.I am an ex herdsman who loved the animals under my care.The farmers love their cows too !
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Anonymous | 10 August 2011 10:59 am
The headline grab is £50 mil in fines, however Arla fine was scrapped as they blew the whistle and the rest had their fines reduced for co-operating. So what was the actual fines paid, probably a lot less than £50 mil.
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Ex Dairy Farmer's Wife | 10 August 2011 11:02 am
I agree give the money back to the dairy farmers. We had to sell up and get out of milk 3 years ago after the herd was established by my father in law in 1963. Forty Five years of milking cows destroyed in an instant by processors and supermarkets. I'm not bitter........not much!! Small dairy herds like us of around 100 cows are still going off in this area to be replaced by factory farms of 500+ cows that are never outside something not right there.
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farmerseriously | 10 August 2011 11:26 am
I agree give the money back to the dairy farmers. I left me husband of 35 years this year because of the stress and strain of running the dairy farm on a shoestring and latterly no holidays or days off. Who works 90 hours a week for such a pittance?
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