Supermarkets admit milk price fix by Finance News Bulletin

Published: 21/12/07

Supermarket firms Sainsbury's and Asda have admitted that they were part of a dairy price-fixing collection that earned about £270m extra from shoppersThe supermarkets, along with a figure of dairy firms, have decided to pay fines totalling some £116m after an Office of pale Trading (OFT) probeThe OFT said that in-store prices went up after the conspiracy, but the amount received by farmers did not add toHowever, the firms insist that the farm gate cost paid for milk did rise and that they were not ripping off customers

The OFT said the collusion saw customers being emotional 3 pence extra for a pint of milk, 15p additional per quarter-pound of butter and 15p per half-pound of cheese, the supervisory body saidIn September, the OFT provisionally found proof of collusion by 10 firms to put prices during 2002 and 2003Now Sainsbury's and Asda have admitted price-fixing of exploit and cheese, as has Safeway - before it was bought by MorrisonsDairy processors Dairy top, the Cheese corporation and Wiseman also reached agreement with the watchdog

Having admitted liability in code, they now face smaller fines as a consequence, the OFT has saidAnother dairy firm, Arla, has been given resistance from fines if it continues to co-operate with the investigationSainsbury's, which has decided to pay a £26m fine, said its cost initiatives in 2002 and 2003 "were designed to assist British dairy farmers at a time of considerable economic force and public debate about whether farmers were getting a pale price for their products""We shared what we intended to do in a very public way as distant as retail prices were worried with our suppliers

They shared that with some of our competitors, and it's that that broke the rules," leader executive Justin King told the BBC"There is no suggestion that what took place was an effort to make more profit In information what actually happened was that higher prices were salaried to farmers"An Asda spokesman said there were "regrets" at the firm, but that its intention "was to provide more money for dairy farmers, who were under harsh financial pressure at the time"

Meanwhile, Tesco said it was "vigourously" defending its position, which it said was dissimilar from its rivals"As we have always said, we acted separately and we did not conspire with anyone," said executive director Lucy Neville-RolfeDairy Crest, which will pay £94m, supposed that the pricing rule occurred in the aftermath of the foot-and-mouth outbreak

"The implementation of these initiatives was very well publicised at the time and received widespread support including physically powerful political backing," it said"Fining them is leaving to achieve what

Overcharged twice, once for the exploit, and then once to cover the fine"Wiseman Dairies, which faces a £61m bill, supposed that "every penny of additional revenues salaried to Wiseman was passed directly to our suppliers""Whilst we are let down with the outcome of the investigation, this agreement removes a long shadow hanging over the corporation," chairman Alan Wiseman said

"This was a period of occasion that was extremely difficult for dairy farmers when prices were very low for a continued period and there was great pressure on dairy companies and retailers for a farm gate cost increase," an NFU spokesman supposed"We are pleased to say that the price for milk is now significantly senior, largely due to changes in the worldwide market"Daily Mail Milked: Supermarkets fined 16m for subjecting clientele to two years of dairy price-fixing

Visit original article: