Investigation into certain large supermarkets and dairy processors regarding retail pricing practices for certain dairy products

The OFT is investigating whether certain large supermarkets and dairy processors have breached the Chapter I prohibition of the Competition Act 1998.

Case reference: CE/3094-03

Start date: September 2003

Final decision:  10 August 2011

Next milestone A non-confidential version of the OFT's decision is expected to be published on the OFT website in autumn 2011.

 

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Update

The OFT has found that Arla, Asda, Dairy Crest, McLelland (prior to its acquisition by Groupe Lactalis), Safeway (prior to its acquisition by Morrisons), Sainsbury's, Tesco, The Cheese Company and Wiseman infringed the Competition Act 1998 by coordinating increases in the prices consumers paid for certain dairy products in 2002 and/or 2003. The OFT has found three infringements were committed and imposed penalties totalling £49.51 million. The infringements related to:

• Cheese in 2002 - involving Asda, Dairy Crest, McLelland (prior to its acquisition by Groupe Lactalis), Safeway (prior to its acquisition by Morrisons), Sainsbury's, Tesco and The Cheese Company
• Cheese in 2003 - involving Asda, McLelland (prior to its acquisition), Sainsbury's and Tesco
• Fresh Liquid Milk in 2003 - involving Arla, Asda, Dairy Crest, Safeway (prior to its acquisition by Morrisons), Sainsbury's and Wiseman.

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Summary of work 

On 20 September 2007, the OFT issued a statement of objections (SO) alleging that the parties had coordinated retail prices' increases for certain dairy products in 2002 and/or 2003, in breach of the Chapter I prohibition.

On 7 December 2007 and on 15 February 2008, the OFT announced that it had reached early resolution agreements with seven of the parties, who had admitted involvement in anti-competitive practices and had agreed to pay individual penalties which came to a combined maximum of over £120m before discounts.

On 23 July 2009, the OFT issued a supplementary statement of objections (SSO), setting out additional evidence in support of the OFT's allegations.

On 30 April 2010, the OFT announced that, following representations and new evidence, the evidence it had on file was insufficient to support an infringement finding with regard to some of the allegations. At that stage, there were no parties contesting the OFT's provisional findings and a decision was expected by autumn 2010.

Tesco subsequently put in representations on the OFT's provisional infringement findings for the remaining allegations against it which the OFT carefully considered as well as the evidence in the case as a whole.

On 10 August 2011, the OFT announced its decision, imposing penalties totalling almost £50 million.

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Related documents 

For further information on the OFT's decision, see press release  OFT fines certain supermarkets and processors almost £50 million in dairy decision (10 August 2011).

For further information on this investigation and early resolution, see press releases:

• OFT welcomes early resolution agreements and agrees over £116m penalties (7 December 2007) 
• Lactalis McLelland agrees early resolution in dairy retail price initiatives investigation (15 February 2008) 

For further information on the update announced on 30 April 2010, see press releases:

• OFT update on Dairy investigation 
• OFT drops a number of allegations against Tesco in Dairy investigation and agrees discount for Tesco not contesting remaining aspects  

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Team leader

Neil Maxey (020 7211 8314, neil.maxey@oft.gsi.gov.uk)

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Project director

Andrew Groves (020 7211 8927, andrew.groves@oft.gsi.gov.uk)

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Senior responsible officers

Ann Pope (020 7211 8786, ann.pope@oft.gsi.gov.uk)

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Media enquiries

Any media enquiries should be directed to a member of our Press Office

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