UK retailers Sainsbury's and Asda and three of the country's largest dairy processors have admitted fixing the price of milk, butter and cheese.
The supermarkets, alongside Dairy Crest, The Cheese Company and Robert Wiseman Dairies, have agreed to pay fines that could reach a combined GBP116m (US$235.2m), following an agreement with the UK's competition watchdog.
The Office of Fair Trading said this morning (7 December) that the five companies had "admitted involvement in anti-competitive practices".
Safeway also admitted being involved before it was bought by Morrisons. However, the investigation will continue against Morrisons, Tesco and dairy firm Lactalis McLelland after no deals were struck.
The OFT said dairy giant Arla Foods will receive "complete immunity from financial penalty" if it continues to co-operate with the watchdog.
In September, the OFT said it had found evidence of collusion between UK retailers and dairy groups to fix the price of milk, butter and cheese in 2002 and 2003. The OFT estimated that the arrangements had cost UK consumers around GBP270m.
The OFT said it was "very pleased" with the "early and constructive cooperation" of some of those accused.
"This case demonstrates the flexible approach the OFT is prepared to take to reduce the burden of investigations, while maintaining strong and effective competition law enforcement," the watchdog said.
"The OFT will continue with its case against Lactalis McLelland, Morrisons and Tesco."
Sectors: Commodities & ingredients, Dairy, Food safety, Retail
Companies: Morrisons, Asda, Dairy Crest, Robert Wiseman Dairies, Tesco, Arla Foods
View next/previous articles
Currently reading -
UK: Retailers, dairy firms admit price fixing
7 Dec 2007 -
There is currently 1 comment on this article
The Asda (Wall-Mart)/Sainsbury et al rip-off is just another example of what companies will do when they are driven by sheer 'Greed'. But if my arithmetic is right, it pays to be greedy. In this respect both supermarket groups and their collaborators pocketed over £300 million ($600 million plus), but where they were only fined jointly no more than £116 million ($235 million). Even if they broke even with their illegal and rip-off transactions, one does not have to be an Einstein to know that this certainly isn't a deterrent by any means. Therefore the greed will just continue and where as the supermarkets have so much dominance and power now, the people will just have to accept it and pay up. Unfortunately for humankind this greed is far more sinister than it appears at face value, for if you look at how the world's resources are being exploited at an alarming rate by corporates, this greed will be the eventual undoing of the human experience itself.
Dr David Hill
World Innovation Foundation
Bern, Switzerland
davidhill said at 6:39 pm, December 8, 2007
Reply to this comment