Supermarkets guilty of milk-price fixing

Supermarket mega-chains Asda, J Sainsbury and Safeway have pleaded guilty to fixing milk and dairy prices following a probe by the Office of Fair Trading (OFT). The trio will have to pay a total of £116m in fines.

The supermarkets could now face the prospect of follow-on actions by wronged consumers or competitors.

The watchdog said that in setting the fines it had “taken into account information provided by the parties involved in the early resolution discussions which demonstrated the pressures they were under at this time to support dairy farmers.”

The admissions followed the OFT’s September findings that said major UK supermarkets fixed the price of milk and other dairy products between 2002 and 2003. The cartel cost the consumer around £270m, said the OFT.

Morrisons has since taken over Safeway.

In September, 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 (, 20 September).

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. Herbert Smith has advised Wiseman while Eversheds has advised Dairy Crest.

The OFT will continue to investigate Tesco and Morrisons and dairy Lactalis McLelland, which did not admit to any price-fixing.