OFT closes investigation into milk supply in Scotland

9 October 2002

The OFT has closed its investigation into alleged price-fixing and market sharing in the market for supply of fresh processed milk to middle ground retailers in Scotland.

The OFT has received several approaches from within the industry alleging the existence of cartel agreements but a thorough and extensive investigation has not provided sufficient evidence to the requisite standard to prove the allegations. The OFT takes the view therefore that although there are grounds for suspecting an infringement of Chapter I of the Competition Act 1998, further investigation is unlikely to lead to an infringement decision and does not warrant the commitment of further resources.

The investigation may be re-opened if substantial further evidence comes to light.

NOTES

1. Powers under the Competition Act 1998

The Act gives the OFT powers to investigate suspected infringements of the Act's prohibitions:

i) the Chapter I prohibition prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition within the UK (or any part of it) and which may affect trade within the UK (or any part of it); and

ii) the Chapter II prohibition prohibits conduct by one or more undertakings which amounts to the abuse of a dominant position in a market which may affect trade within the UK (or any part of it).

2. Middle ground retailers are customers that are not supermarkets or supplied by doorstep deliveries.

3. In this press release the functions of the Director General of Fair Trading (DGFT) under the Act are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.

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