Scottish dairies cleared in global price fix clampdown

By Neil Merrett

- Last updated on GMT

Related tags: Robert wiseman dairies, Allegation, Milk, Oft

UK competition authority, the Office of Fair Trading, says it will not be taking action against six Scotland-based dairy companies accused of engaging in price fixing.

The OFT said that Allantyne, Grahams, Quothquan, Renfrew, Scottish Milk Dairies and Wiseman were all cleared of the allegations they had cooperated in market sharing over a three year period between 2000 and 2003.

Such a ruling comes as a number of dairy manufacturers and retailers in Europe and the US have been linked to similar allegations over the last two years.

Original objections

Back in September 2006, the OFT issued a Statement of Objections (SO) after it had found what it claimed was sufficient proof to suggest that collaboration between the companies had taken place.

No further action is now to be taken though, after further investigations by the authority suggested that the case should be dropped.

“As a result of continuing investigations, which included consideration of the parties' responses to the SO, the OFT no longer considers that it has sufficient evidence to proceed to an infringement decision as set out in the [objections],”​ the authority said. “The OFT has also decided that continuing with the investigation would not be an appropriate use of its resources.”

International accusations

One undeniable pattern within the current global dairy market over the last 13 months has been the emergence of a number of similar investigations into allegations of dairy price fixing occurring from the US to the Mediterranean region.

In May of this year, US-based cooperative Dairy Farmers of America, was forced to deny allegations of​any wrongdoing over price fixing for some of its products, amidst an ongoing enquiry by the Department of Justice and the Commodity Futures Trading Commission (CFTC).

Meanwhile, in December 2007, Nestle and Vivartia were named among a number of processors facing fines imposed by the Greek competition authority for allegedly fixing dairy prices in the country.

The charges, which totalled about €48m, were put in place following the findings of a year-long investigation into the sharing of price information in the country.

News of these fines came just three months after a provisional decision was revealed by the OFT concerning an investigation into the UK dairy industry.

In the decision, announced on 20 September 2007, the OFT alleged that supermarkets and dairy processors, including Asda, Tesco, Arla Foods and Dairy Crest, cheated consumers out of £270m (€389m).

By December, the competition authority 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, which resulted in combined fines of about £116m (€161m).

Arla Foods escaped punishment for cooperating with the enquiry.

Related topics: Markets, Pricing Pressures

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