A number of Scottish dairy companies have hit out at Arla following the closure of a seven-year investigation accusing them of price fixing.
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The Office of Fair Trading (OFT), which provisionally found that six Scottish dairy producers had engaged in illegal price fixing and market sharing activity, terminated the investigation on Friday (17 October) due to insufficient evidence.
The investigation, which began in June 2000, was a result of complaints from Express Dairies – a rival company subsequently sold to the UK arm of Arla Foods in 2003.
In 2002, the OFT concluded that the complaints were baseless and closed its investigation. However, Express Dairies appealed and, as a result, the OFT began another investigation in July 2003 and the case was reopened in September 2006.
Following the closure of the investigation, the six dairies – Ballantyne, Grahams, Quothquan, Renfrew, Scottish Milk Dairies and Robert Wiseman Dairies – have all been left with large legal bills.
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By GlobalDataRobert Wiseman dairies said in a statement it welcomed the decision which, it claimed, vindicated its position “that this case should be closed”.
A spokesperson for the dairy said that the group had come out of the investigation determined to drive growth.
“Far from slowing us down this [investigation] has galvanised us as a management team to move forward with determination and that’s what we’ve done and what we’ll continue to do,” the spokesperson told just-food.
“One of the realities is that when you are at the receiving end of an investigation of this kind, you have to defend yourself and it is fair to say we’ve had to invest several hundreds of thousands of pounds in doing that. Now that money is not recoverable and that leaves us with a sense of frustration given that the investigation was sparked by a complaint that we felt had no foundation.”
Robert Graham, the managing director of Graham’s, Britain’s seventh largest liquid milk producer, said the case had been “an emotional burden to everyone involved with Graham’s for the past seven years”.
“We made it clear from the outset that allegations of impropriety on our part were entirely without foundation and worked with the OFT throughout the process to ensure the reputation of our family business remained intact. Express Dairies failed in its attempt to build significant market share in Scotland – a country serviced by well-established and respected family companies,” he commented.
The company said the cost has been “significant” and legal fees have reached in excess of GBP500,000, money which it said was earmarked for developing the business.
Arla were unavailable for a comment on the ruling as just-food went to press.
