Arla sues Wiseman in UK price fixing dispute
twist this week, after Arla Foods UK revealed it would sue rival
Robert Wiseman to recoup lost revenue.
Arla and its Scottish subsidiary, Claymore Dairies, demanded a combined £15m in compensation from six dairy companies, including Wiseman. All six were recently accused of price fixing in Scotland by the UK's Office of Fair Trading (OFT).
The legal action is another dent to relations between UK dairy firms, and again escalates a row that has been simmering between Arla and Wiseman for several years.
The OFT in September alleged it had evidence that Wiseman, alongside Scottish Milk Dairies, Graham's, Renfrew, Ballantyne and Quothquan, had illegally made deals to raise prices and carve up markets in Scotland.
The allegations, which follow six years of investigation, mainly concern milk sold to middle ground customers such as schools, shops and caterers - not supermarkets. Any firm found guilty could face a fine of up to 10 per cent of its annual sales, under EU law.
Wiseman has rejected the charge and this week also vowed to defend itself against Arla's "frivolous claim.
"This latest development is part of what Wiseman considers to be a long running campaign by Express/Arla dating back to 1999 to lay the blame at other parties in respect of their flawed commercial strategy in Scotland."
Arla and Wiseman have been at loggerheads in Scotland for some time.
The OFT cleared Wiseman in 2002 of abusing its market position in Scotland, but Arla appealed and the decision was eventually criticised last autumn by the Competition Appeals Tribunal.
It said there were "serious doubts" about crucial aspects of the OFT's investigation, but it refused to formally reopen the case. New allegations of price fixing by Wiseman and others reveal the ongoing tension, however.
They also threaten to further damage relations between the UK's top dairy firms at a time when industry officials appear keen to promote greater co-operation.
Both the Milk Development Council and the National Farmers' Union have said more industry co-ordination could spur much-needed innovation and make the UK dairy sector more competitive.