Vivartia faces further price fix strife

By Neil Merrett

- Last updated on GMT

Related tags: Dairy processors, Milk

Vivartia is bearing the brunt of a further round of fines imposed
by Greece's competition regulator on a number of the country's
leading dairy processors and retailers for their part in alleged
anti-competitive practices.

The company said on Friday that it faced €21.7m in charges from the Hellenic Competition Authority for allegedly making vertical agreements through its supply and distribution chain. A further nine companies including Mevgal, Fage and retailer Carrefour are also alleged to be involved in the latest round of price fixing amounting to about €28m worth of fines for the industry, according to the Dow Jones Newswires service. The news means further trouble for the country's dairy industry following similar allegations of price collusion made by the Greek regulator just last month. The latest allegations continue to highlight the difficulties for processors in remaining competitive in terms of pricing without facing accusations of breaking competition rules. However, Vivartia insisted in a statement it would continue to battle the allegations made by the regulator. "Vivartia assures the investor and consumer community that [the company] is always guided by its commitment and respect of the laws for the protection of free competition,"​ the group stated. "Vivartia is convinced that the decision of the competent courts will fully justify its position."​ The decision by Greece's competition authority tops off a difficult end to 2007 for Vivartia. The company, along with a number of other dairy processors like Nestlé, were last month accused of fixing prices between themselves. National-based rivals Mevgal, Fage and Olympos were also suspected of collusion over milk prices in 2004, according to the Associated Press agency. It is not just in Greece though where processors have come under regulatory scrutiny for their pricing strategies in recent years. December 2007 also saw a number of UK-based retailers and dairy processors admitting involvement in alleged dairy price fixing for powdered milk, butter and cheese, resulting in combined fines of about £116m (€161m) from the country's own regulator. ​The UK Office of Fair Trading (OFT) said it had entered into early resolution with Asda, Dairy Crest, Sainsbury's, The Cheese Company and Robert Wiseman Dairies over their involvement in sharing sensitive information. However, the UK arm of Arla Foods escaped punishment for cooperating with the enquiry.

Related topics: Markets, Pricing Pressures

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