The marathon probe into price fixing in the dairy trade has culminated with fines of nearly £50m being handed out to retailers and suppliers.

The Office of Fair Trading today concluded its four-year investigation by issuing fines worth £49.51m for breaches of the 1998 Competition Act. The companies involved were found to have co-ordinated the prices paid for liquid milk and cheese in 2002 and 2003.

Supermarkets Tesco, Asda, Sainsbury’s and Safeway (since absorbed into Morrisons) were joined on the supplier side by McLelland, Dairy Crest, Robert Wiseman Dairies and The Cheese Co (now part of Milk Link).

Arla, although also implicated, was granted immunity from fines for alerting the OFT to the infringements.

“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,” said OFT chief executive John Fingleton.

Today’s announcement marks the end of an investigation that began in 2007. The parties involved were originally in line for fines equating to £120m before discounts for cooperating with the watchdog’s enquiries.

Tesco, which was fined £10.43m, has denied collusion and is reportedly considering legal action against the penalty.

Read more
OFT reduces fines for price-fixing in dairy (8 May 2010)
OFT to pay back millions after dairy probe U-turn (30 April 2010)