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September 20, 2007

UK: Tesco, Arla embroiled in dairy price-fixing row

UK retailers are this morning (20 September) facing claims that they colluded with dairy companies to hike up the price of milk, butter and cheese.

UK retailers are this morning (20 September) facing claims that they colluded with dairy companies to hike up the price of milk, butter and cheese.

The UK’s Office of Fair Trading said collusion between the likes of Tesco, Asda, Dairy Crest and Arla Foods over a two-year period cost consumers some GBP270m (US$541.7m).

The OFT has claimed that retailers and dairy processors fixed the retail prices of milk, butter and cheese in 2002 and 2003. The OFT also named retailers Morrisons, Safeway and Sainsbury’s, as well as dairy groups Lactalis McLelland, The Cheese Company and Robert Wiseman in its findings.

“This is a very serious case,” said OFT executive director Sean Williams. “believe supermarkets have been colluding to put up the price of dairy products. Consumers have lost out to the tune of hundreds of millions of pounds.”

The OFT will not issue a definitive verdict on whether UK competition law has been breached until it has received responses from the retailers and dairy firms concerned.

Williams added: “Businesses should understand that where we find evidence of this kind of anti-competitive activity we will use the powers at our disposal to punish the companies involved and to deter other businesses from taking such actions.”

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