Blog: Dean BestUK consumers cheesed off at price-fixing claims

Dean Best | 20 September 2007

Claims of price-fixing in the UK dairy sector are pretty ironic given the price increases being paid to the country’s farmers this year as milk supply tightens.

The UK’s competition watchdog claims the country’s largest supermarkets and number of its leading dairy processors colluded to raise the price of milk, butter and cheese – leaving shoppers out of pocket to the tune of GBP270m (US$542m).

The period under review is 2002/03, a time when farmers were under severe financial pressure and many were leaving the industry. Now, farmers are reaping the benefits of bumper price rises amid heightened demand and restricted supply.

The story is full of irony. Claims that retailer and supplier joined forces to illegally fix prices is an unrecognisable picture to many food processors facing perpetual pressure from retailers on price. Indeed, in recent weeks, some suppliers have even called for a “supermarket watchdog” to ensure UK retailers do not abuse their power.

Nevertheless, the whole situation just feeds the growing scepticism among the UK public over the motives of the country’s retailers. Just the allegation that the supermarkets trousered the extra cash from higher dairy prices will leave shoppers all the more certain that the likes of Tesco, Asda and Morrisons are only interested in profiteering from consumers.


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