The dairy industry has expressed shock and disappointment over the OFT’s decision to refer the acquisition of Hartington Creamery to the Competition Commission. Long Clawson’s purchase of the creamery from Dairy Crest was completed at the end of August, but the OFT last week said it had referred the sale to the commission for investigation.

The OFT said the reduction from three to two major Stilton suppliers could lead to higher prices for retailers, which might then be passed on to consumers. “This deal presents a risk of higher Stilton prices for shoppers at the UK’s biggest supermarkets,” claimed OFT senior director of mergers, Simon Pritchard.

Dairy UK director general Jim Begg described the OFT’s decision as “absolutely staggering”. “To suggest that Long Clawson can somehow hold sway over the mighty retail sector is absolutely and plainly absurd,” he said, adding that such decisions would stop British dairy producers being able to compete with foreign rivals. “The OFT must allow the rationalisation to develop,” he said.

Long Clawson had seen the purchase as an essential step in securing the long-term future of Stilton manufacturing. “We were looking forward to getting on with integrating the two businesses, improving quality and value for the benefit of our farmer members, our customers and our consumers,” said chief executive Martin Taylor.

It had appeared that the way had been paved for further consolidation in the dairy sector when competition authorities gave the green light to Milk Link’s merger with First Milk last year, although the deal ultimately fell through.

The OFT had betrayed its ignorance of how the sector operated, said experts. “The people who have decided this maybe don’t quite know how these price negotiations go,” said British Cheese Board chairman Nigel White.

The commission has invited responses from interested parties by 24 October and has until 24 March 2009 to issue its report.