Tesco defies OFT over dairy price collusion fine
Published:  10 August, 2011

Tesco is threatening legal action over a £10m fine it has incurred from the competition watchdog, the Office of Fair Trading (OFT), for its role in dairy price fixing.

Tesco, Sainsbury’s, Asda and Safeway (now part of Morrisons) and five dairy processors have been fined a total of £49.51m by the OFT for coordinating prices rises of dairy products for consumers in 2002-3.

However, Tesco denies that it colluded in the price fixing and is threatening to defend its position vigorously “through the courts if necessary”.

The OFT issued its decision following an investigation into infringements of the Competitions Act 1998. It found that the companies indirectly exchanged retail pricing intentions with each other via the dairy processors.

Supermarket chains Asda, Sainsbury’s and Safeway and dairy processors Arla, Dairy Crest, McLelland, The Cheese Company and Wiseman have all received lenient fines after admitting liability.

John Fingleton, OFT chief executive, said: “This decision sends a strong signal to supermarkets, suppliers and other businesses that the OFT will take action and impose significant fines where it uncovers anti-competitive behaviour aimed at increasing the prices paid by consumers.

“Competition in the supermarket sector is generally intense and has delivered significant benefits to shoppers across the UK in terms of innovation, choice and improved value for money. Our investigation and this final decision will help ensure that this competition is maintained.”

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