European dairy giants Nestle and Vivartia are among a number of companies facing fines imposed by the Greek competition authority for allegedly fixing dairy prices in the country, press reports have said.
A number of the countries foremost dairy processors face the charges, which total about €48m following the findings of a yearlong investigation over claims they shared price information, the Hellenic Competition Authority told the Associated Press yesterday.
The fines could represent an end to a long running corruption scandal in the country, and highlight the increasing pressure on dairy processors to remain competitive with their pricing without being accused of breaking-competition rules.
Reports still differ over the exact number of companies involved, though at least three other companies Mevgal, Fage and Olympos are all facing the charges over allegations that they colluded over milk prices in 2004.
There were further allegations that some of the processors were also briefly involved in sharing price information on yoghurts.
The scandal hit headlines last September, when a senior official in the Hellenic competition authority was charged with blackmail after allegedly demanding about €2.5m from a company under investigation. That case still awaits trial.
It is not just Greek authorities, which have shown concern over prices being paid for some dairy goods.
News of the fines comes just three months after a provisional decision was revealed concerning a similar investigation into UK dairy price fixing by the Office of Fair Trading (OFT).
In a provisional decision announced on 20 September, the OFT alleged that supermarkets and dairy processors, including Asda, Tesco, Arla Foods and Dairy Crest cheated consumers out of £270m (€389m).
If found to be true, these supermarkets and dairy processors will have broken UK law under the Competition Act 1998, which "prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK".
OFT claims the companies shared "highly commercially sensitive information, including details of the levels of price increases" over a two year period of 2002 to 2003.
"This is a very serious case," said Sean Williams, executive director of OFT, following the announcement. "We believe supermarkets have been colluding to put up the price of dairy products. This kind of collusion on price is a very serious breach of the law."
OFT alleges the supermarkets and dairy processors were aware that these collaborations were illegal and anti-competitive, and had been warned about this in the past by the regulator.
"Businesses should understand that where we find evidence of this kind of anti-competitive activity, we will use the powers at our disposal to punish the companies involved and to deter other businesses from taking such actions," said Williams.
The British Retail Consortium (BRC) denies the price fixing charges while Dairy Crest said it had co-operated fully with the OFT's investigations over the past three years, and would continue to do so.
"The OFT explains for the first time since the investigation began what evidence it proposes to rely on to support the allegations of infringement of competition law," the company said. "The next steps for Dairy Crest will be to review the OFT's provisional findings in detail, and respond accordingly."