7th Dec 2007 07:15
Sainsbury(J) PLC07 December 2007 7 December 2007 OFT DAIRY INVESTIGATION CONCLUDED J Sainsbury plc (Sainsbury's) today confirms that is has agreed to pay asettlement of £26m to the Office of Fair Trading (OFT) relating to itsinvestigation into dairy retail price initiatives for milk and cheese in 2002and 2003. This concludes the OFT's investigation of Sainsbury's. Sainsbury's has co-operated fully and responded swiftly to the OFT'sinvestigation. The level of the settlement reflects this co-operation and theexceptional circumstances prevailing at the time, which led to a prolongedperiod of farmer protest and disruption in the industry. Sainsbury's chief executive, Justin King said: "We are disappointed that wehave been penalised for actions that were intended to help British farmers, butrecognise the benefit of a speedy settlement with the OFT. "The price initiatives in 2002 and 2003, which were widely and publicly reportedat the time, were designed to help British dairy farmers at a time ofconsiderable economic pressure and public debate about whether farmers weregetting a fair price for their products. "We work incredibly hard to make sure that the 16.5 million customers who visitour stores each week are able to buy quality products at fair prices. Ensuringwe remain competitive on price is a key strand of our strategy as is ensuringour suppliers receive a fair deal. We are fully committed to supporting Britishfarming and to sourcing wherever possible in the UK". Last year, Sainsbury's launched the Sainsbury's Dairy Development Group (SDDG),which aims to deliver greater profits to dairy farmers by working with them toinnovate and improve their on farm efficiencies. This is supported by a multimillion pound fund. All 320 members of the SDDG are now receiving a premium of 1.5ppl over theprocessor standard prices, earning farmers supplying liquid milk for Sainsbury'sone of the highest returns in the liquid milk markets. At today's liquid milkprices, Sainsbury's is paying £20 million more per annum to the farmers. Ends Enquiries: Investor Relations MediaElliot Jordan Pip Wood / Gillian Taylor+44 (0) 20 7695 4931 +44 (0) 20 7695 6127 / 0207 695 2750 Notes to editors: - 1. The OFT's investigation was conducted under Chapter 1 of the UK CompetitionAct 1998, which gives the OFT the power to impose penalties on companies foranticompetitive behaviour. The infringements of UK competition law admitted toby Sainsbury's as part of the settlement concern the exchange of informationwith processors relating to future pricing intentions for milk and cheese in2002 and 2003. 2. As part of Sainsbury's Dairy Development Group, farmer representatives haveworked with Sainsbury's to identify areas such as herd health and milkrecording, carbon footprint audits and IT support to ensure dairy farmers havethe tools they need to produce British milk for years to come. 3.The £26m figure noted in paragraph one represents an agreed sum, furtherdiscounted for early resolution and ongoing co-operation. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Sainsbury's