23rd Jul 2009 07:01
Office of Fair Trading Statement for issue of Dairy SSO
The OFT has today issued a supplementary statement of objections (SSO) to all of the parties involved in its Dairy Retail Price Initiatives investigation. The SSO sets out additional evidence in support of the OFT's provisional findings in its statement of objections (SO) issued on 20 September 2007 that the parties involved in the investigation had colluded to increase the retail prices of certain dairy products in 2002 and/or 2003 in breach of the Chapter I prohibition in the Competition Act 1998 (see notes 1 and 3).
The parties that are continuing to contest the OFT's provisional findings are Morrisons and Tesco. The other parties involved in the investigation have all admitted their involvement in certain of the alleged anti-competitive practices identified by the OFT in the SO and have agreed to pay individual penalties, or have applied for leniency (see note 2).
Morrisons and Tesco now have an opportunity to make written and oral representations in response to the SSO. At this stage it should not be assumed that the law has been broken. The OFT will carefully consider any representations, and the evidence as a whole, before reaching any final decision.
NOTES
1. The Competition Act 1998 prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK. The Chapter I prohibition covers anti-competitive agreements and concerted practices, that have the object or effect of preventing, restricting or distorting competition in the UK or a part thereof.
2. The other parties are: Asda, The Cheese Company (formerly Glanbia Foods Limited), Dairy Crest, Lactalis McLelland (in relation to conduct by A McLelland and Son Limited prior to its acquisition by Groupe Lactalis), Safeway (in relation to conduct prior to its acquisition by Morrisons), Sainsbury's and Wiseman, which have all admitted their involvement in certain of the alleged anti-competitive practices identified by the OFT in the SO and have agreed to pay individual penalties (see note 4); and Arla, which applied for leniency (see note 5)
3. The SO made the following infringement allegations:
Arla is alleged to have facilitated the exchange of commercially sensitive information between certain retailers in respect of the retail price of certain liquid milk products in 2002 and fresh liquid milk 2003.
Dairy Crest is alleged to have facilitated the exchange of commercially sensitive information between certain retailers in respect of the retail price of UK produced cheese in 2002 and in respect of fresh liquid milk and value butter in 2003.
Wiseman is alleged to have facilitated the exchange of commercially sensitive information between certain retailers in respect of the retail price of fresh liquid milk in 2003 only.
The Cheese Company (formerly Glanbia Foods Limited) is alleged to have facilitated the exchange of commercially sensitive information between certain retailers in respect of the retail price of UK produced cheese in 2002 only.
Lactalis McLelland (as A McLelland and Son Limited, prior to its acquisition by Groupe Lactalis) is alleged to have facilitated the exchange of commercially sensitive information between certain retailers in respect of the retail price of UK produced cheese in both 2002 and 2003.
Asda is alleged to have indirectly disclosed to and/or exchanged with certain other retailers commercially sensitive information in respect of the retail price of certain liquid milk products in 2002, fresh liquid milk in 2003 and UK produced cheese in both 2002 and 2003.
Morrisons is alleged to have indirectly disclosed to and/or exchanged with certain other retailers commercially sensitive information in respect of the retail price of certain liquid milk products in 2002 only.
Safeway (prior to its acquisition by Morrisons) is alleged to have indirectly disclosed to and/or exchanged with certain other retailers commercially sensitive information in respect of the retail price of certain liquid milk products in 2002, fresh liquid milk in 2003, UK produced cheese in 2002 and value butter in 2003. The OFT's provisional findings in respect of Safeway relate to conduct that occurred prior to its acquisition by Morrisons.
Sainsbury's is alleged to have indirectly disclosed to and/or exchanged with certain other retailers commercially sensitive information in respect of the retail price of certain liquid milk products in 2002, fresh liquid milk in 2003 and UK produced cheese in both 2002 and 2003.
Tesco is alleged to have indirectly disclosed to and/or exchanged with certain other retailers commercially sensitive information in respect of the retail price of certain liquid milk products in 2002, fresh liquid milk in 2003, UK produced cheese in both 2002 and 2003 and value butter in 2003.
4. Asda, The Cheese Company (formerly Glanbia Foods Limited), Dairy Crest, Lactalis McLelland (in relation to conduct by A McLelland and Son Limited prior to its acquisition by Groupe Lactalis), Safeway (in relation to conduct prior to its acquisition by Morrisons), Sainsbury's and Wiseman have concluded early resolution agreements with the OFT. These parties will receive a significant reduction in the financial penalty that could otherwise be imposed, on condition that they continue to cooperate fully with the OFT's investigation, including providing further evidence as far as reasonably possible. See press releases http://www.oft.gov.uk/news/press/2007/170-07 and http://www.oft.gov.uk/news/press/2008/22-08 for details.
5. Arla will receive complete immunity from financial penalty if it continues to cooperate fully with the OFT's investigation.
6. A statement of objections, including a supplementary statement of objections, gives notice of a proposed infringement decision under the Competition Act 1998 to the parties involved. It sets out the facts on which the OFT relies, the objections raised by the OFT, the action it proposes to take and the reasons for it.
Related Shares:
MRW.LTesco