Valio, the Finnish dairy processor, has insisted it will appeal against a EUR70m (US$95.1m) fine for abusing its position in the market despite already losing two hearings to question the penalty.
Last week, Finland’s Market Court rejected Valio’s latest appeal against the fine, which was proposed by the Finnish Competition and Consumer Authority in 2012.
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The FCCA had ruled Valio had abused its “dominant position in the production and wholesale market of fresh milk”. The watchdog argued the decision was a “landmark” in evaluating whether businesses take advantage of dominant positions in the market.
According to the FCCA, the Market Court agreed with the anti-trust body’s view that Valio had “engaged in predatory pricing in order to remove effective competition from the fresh milk market in Finland”.
However, Valio has said it will appeal the latest verdict at Finland’s Supreme Administrative Court. It said the ruling would be “expensive” for the company and for Finnish consumers.
“The decision prevents genuine competition in the milk market and shuts Valio out. The cost will be borne by consumers in an artificially high price for basic milk and by Valio in terms of a hampered ability to invest,” Valio CEO Pekka Laaksonen said. “We are disappointed that Valio’s profitable alternative for processing milk and competing for customers in the years 2010–2012 is viewed as predatory pricing.”
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By GlobalDataLaaksonen added: “The decision means that all dairy players in Finland will benefit from the margin generated by Valio’s entire innovative range with no particular contribution of their own to product development.”
Nevertheless the FCCA said it was “satisfied” with the Market Court’s decision to dismiss Valio’s latest appeal.
“It sends a strong signal that abuse of dominance and other conduct contrary to the Competition Act will not be tolerated. It is in the interests of consumers to preserve the competitive structure of the market. The decision also demonstrates that the competition authority and the Court are capable of evaluating broad and complicated competition issues,” Juhani Jokinen, director general of the FCCA, said.
