As retailers continued to deny allegations they had made £270m from price fixing in the dairy industry, attention began to turn this week to the milk processors.

A spokesman for one retailer said the Office of Fair Trading, which provisionally found against the dairy sector last week, had got its sums wrong. Money from higher retail prices in 2002 and 2003 had been passed down the chain to desperate farmers, he insisted.

However, farmers maintained they had been "ripped off" and had seen very little of the money. "While retailers have been raking in high prices for dairy products they have been stubbornly paying farmers dwindling returns," said Farmers Union of Wales vice president Eifion Huws. "In 2001 the farmgate price for a litre of milk was 18.47p and the retail price was about 43p. But this year, farmers were getting 0.5p per litre less while the housewife had to pay nearly 14p more."

In the search for the missing money, the spotlight has now been thrust on the dairy processors. The OFT said it wanted to know where the money had gone. A spokeswoman said: "All our evidence is that it didn't go down the chain to farmers. It is for the retailers and processors now to show where it did go." However, the regulator admitted the information may not materially affect the price-fixing charge, because it was only interested in pricing collusion.

Dairy companies were tightlipped as they planned their legal responses to the findings. Robert Wiseman Dairies, one of the processors named by the OFT alongside Arla, Dairy Crest, Lactalis McLelland and The Cheese Company, said it would defend its position.

Milk Link, which now owns The Cheese Company, was swift to point out that the business belonged to Irish dairy giant Glanbia in 2002. It refused to comment on its liabilities as the new owner. The OFT said it wanted to conclude the investigation by late 2008.

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