20th Sep 2007 07:01
Office of Fair Trading20 September 2007 134/07 20 September 2007 OFT ISSUES PROVISIONAL DECISION AGAINST SUPERMARKETS AND DAIRIES OVER PRICE FIXING The Office of Fair Trading has provisionally found that large supermarkets anddairy processors have colluded to increase the prices of dairy products whichled to an estimated cost to consumers of around £270 million. The OFT has today issued a statement of objections, setting out its provisionalfindings, to Asda, Morrisons, Safeway, Sainsbury and Tesco, as well as dairyprocessors Arla, Dairy Crest, Lactalis McLelland, The Cheese Company andWiseman. The provisional finding is that these supermarkets and dairy processors engagedin fixing the retail prices for milk, butter and cheese, in breach of theCompetition Act, by sharing highly commercially sensitive information, includingdetails of the levels of price increases, over a two year period (2002 and2003). The OFT has provisionally found that this practice was harmful to consumers byrestricting the competitive process, leading to higher prices. The OFT alsobelieves that the parties understood their actions might be anti-competitive andin fact retailers were previously warned of this by the OFT. Sean Williams, OFT Executive Director, said: 'This is a very serious case. We believe supermarkets have been colluding to putup the price of dairy products. Consumers have lost out to the tune of hundredsof millions of pounds. This kind of collusion on price is a very serious breachof the law. Businesses should understand that where we find evidence of thiskind of anti-competitive activity we will use the powers at our disposal topunish the companies involved and to deter other businesses from taking suchactions.' The OFT will not be in a position to decide if the law has been breached untilit has received and reviewed the parties' responses to the statement ofobjections and any comments from interested third parties. NOTES 1. The Competition Act 1998 prohibits agreements, practices and conduct that mayhave a damaging effect on competition in the UK. The Chapter I prohibitioncovers anti-competitive agreements and concerted practices, that have the objector effect of preventing, restricting or distorting competition in the UK or apart thereof. 2. A statement of objections gives notice of a proposed infringement decisionunder the Competition Act 1998 to the parties involved. The parties then havethe opportunity to make written and oral representations in response to the caseset out by the OFT. Such representations will be considered by the OFT beforeany final decision is made. 3. The statement of objections will not be published. In accordance with theOFT's guidance on 'Involving third parties in Competition Act investigations',(www.oft.gov.uk) any person who wishes to comment on the OFT's provisionalfindings, and who is in a position to materially assist the OFT in testing itsfactual, legal or economic arguments, may request a non-confidential version ofthe statement of objections by contacting the OFT no later than 11 October 2007. MEDIA enquiries: 020 7211+Corinne Gladstone 8899 Alex Hunter 8900Jonathan Marciano 8133 Nick Spears 8901Nnenna Oleforo 8898Out of hours: mobile: 07774 134814 fax messages: 020 7211 8961Copies of press notices: Ext. 8993http://www.oft.gov.uk PUBLIC enquiries: 0845 7224499 [email protected] reports and consumer information leaflets are available free from:OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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