OFT announces early resolution agreements on price fixing investigation
Published 07 December 2007

The Office of Fair Trading (OFT) has announced that a number of parties named in its price fixing investigation, have admitted involvement in anti-competitive practices. The agreements will result in fines of £116 million.

Processors Dairy Crest, The Cheese Company and Robert Wiseman Dairies, along with retailers Asda, Safeway and Sainsbury’s, have all admitted to colluding to increase the price of dairy products during 2002 and 2003.   Reports suggest that during the period, consumers were being charged an extra 3 pence for a pint of milk, up to 15 pence per quarter-pound of butter, and 15 pence per half-pound on some cheeses.

The early resolution will result in processor Dairy Crest being fined £9.4 million, and Robert Wiseman paying £6.1 million for its part in the price fixing deal.  The Cheese Company will pay up to £2 million, with Sainsbury’s agreeing to a fine of £26 million.  Both Asda and Safeway have not commented on the fines they received.  

A leniency agreement between processor Arla and the OFT means that provided it continues to cooperate fully with the watchdog, it will escape any kind of financial retribution.

Supermarkets Tesco and Morrisons, and also processor Lactalis McLelland, are still being investigated, following the statement of Objectives from the OFT on the 20/09/07, stating that each company had: alleged to assist in or disclose / exchange commercially sensitive information in respect of certain dairy products between retailers during 2002 and 2003. If the companies are found guilty, they could be fined up to 10% of global turnover.

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