Tesco stands firm on dairy collusion claims

Posted by Daniel Palmer on 24th July 2009

Tesco is continuing to defend itself over allegations of dairy price-fixing in the UK after the country’s competition watchdog released fresh evidence in support of previous findings.In 2007, the Office of Fair Trading (OFT) found that a number of retailers and food producers had conspired to fix the retail prices of milk, butter and cheese in 2002 and 2003.

Five firms, retailers Sainsbury’s and Asda, plus dairy groups Dairy Crest, The Cheese Company and Robert Wiseman Dairies, agreed to pay fines of around GBP116m (US$235.2m). Safeway also admitted being involved before it was bought by Morrisons.

However, the investigation is continuing against Morrisons and Tesco after no deals were struck.

The OFT today (23 July) issued a “supplementary statement of objections”, giving additional evidence in support of its earlier findings. It is believed the two retailers will now be allowed to put their response to the fresh allegations before the OFT reaches its final decision.

Tesco, however, said it will continue to defend its position strongly and that it was helping the OFT with the next stage of the long-running enquiry.

“We have made it clear that we did not collude with anyone and that remains the position,” said executive director Lucy Neville-Rolfe. “We will of course look carefully at any new evidence the OFT sends to us relating to events that took place in 2002 and 2003. We always strive to give a good deal for customers and we deliver on this in a fiercely competitive market.”

Morrisons also said it would contest the provisional findings and that it would wait to read the document in detail.

“Our initial view is that nothing has changed since the original statement issued two years ago, in 2007,” a spokesperson for the retailer said. “It remains our firm belief that there are no reasonable grounds for the OFT’s allegations against us and no evidence to suggest our involvement.

The retailer said it will make strong representations that it should not be part of the inquiry.

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