OFT hits supermarkets and dairies with price-fixing claim

The Office of Fair Trading (OFT) today has accused the UK’s major supermarkets and dairies of price-fixing.

The competition regulator set out its provisional findings of price-fixing of dairy products by Asda, Morrisons, Safeway, Sainsbury and Tesco. Dairies Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman were also named.

The OFT’s provisional findings follow ongoing investigations into supermarkets, both by the OFT and by the Competition Commission. The supermarkets have instructed longstanding advisers on the probes: Asda uses Norton Rose; Sainsbury’s has turned to Linklaters; Morrisons and Arla have instructed Ashurst; and Tesco is advised by Freshfields Bruckhaus Deringer. Meanwhile, Herbert Smith has advised Wiseman.

The price-fixing, over a two-year period in 2002 and 2003, cost UK consumers around £270m, said the OFT. If the provisional findings are confirmed, the five supermarkets and dairies could face fines of hundreds of millions of pounds.

The OFT’s executive director Sean Williams said: “This kind of collusion on price is a very serious breach of the law. Businesses should understand that where we find evidence of this kind of anticompetitive activity we will use the powers at our disposal to punish the companies involved and to deter other businesses from taking such actions.'”

The accusations by the OFT are, for now, provisional findings. This means that the supermarkets and dairies have the right to reply to the statement of objections. The OFT will also wait to receive comments from third parties before making a final decision.