UK: Tesco wins partial victory in OFT price-fixing case

By Michelle Russell | 21 December 2012

Tesco said it was “pleased” with the judgement

Tesco said it was “pleased” with the judgement

UK retail giant Tesco has won a partial victory in a long-running Office of Fair Trading investigation into dairy price-fixing.

The supermarket was fined GBP10m (US$16.1m) last year for alleged price-fixing in the cheese market with suppliers and rival retailers in 2002 and 2003. It resulted in an OFT investigation that began in 2004.

A total of GBP49.5m in fines were imposed in 2011 after the OFT found four retailers had indirectly informed each other of what prices they would levy on dairy products through the manufacturers. Some retailers, including Asda and Sainsbury's, admitted fixing prices but Tesco has maintained its innocence throughout the investigation.

In a statement this week, the Competition Appeal Tribunal rejected more than half of the OFT's findings. It said there was "insufficient evidence to support a number of the conclusions reached by the OFT" and that "none of the five strands, as found in the decision, were proved as against Tesco".

It did say Tesco was guilty of communicating its future retail pricing intentions to rival retailers via processors McLelland and Dairy Crest three times in 2002.

The Tribunal said it will now seek further argument on that aspect and the level of fine.

The OFT said it welcomed today's tribunal findings that Tesco "infringed competition law in relation to certain anti-competitive exchanges of its pricing intentions" and that it will "consider the judgment in detail, including the next steps".

Tesco said it was "pleased" with the judgement and that it has "always maintained it was not part of an overall plan to collude on prices".

"The OFT's case focused on events which took place a decade ago. It is common ground that the industry faced unprecedented public pressure to increase the price received by farmers for their milk. We have noted the CAT's findings about three isolated communications in 2002. We have of course updated our compliance practices since that date," a spokesperson for Tesco said. "All the other allegations against us in this ten year process have already been dropped."

Sectors: Dairy, Retail

Companies: Tesco, Asda, Sainsbury’s, Dairy Crest

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