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194/05 19 October 2005
The OFT today referred the anticipated acquisition by Robert Wiseman Dairies plc of the fresh milk business of Scottish Milk Dairies Limited to the Competition Commission (CC).
The OFT has decided that the test for reference is met in relation to the supply of milk to middle ground customers, such as shopkeepers and small grocery chains, in the Scottish Central belt area.
Vincent Smith, Director of Competition Enforcement at the OFT, said:
'This transaction would put the milk business of a rival dairy in and around Glasgow in the hands of Wiseman, the largest supplier of fresh milk in Scotland. As a result, middle ground customers in the area of overlap could face higher milk prices.'
The OFT has asked the CC to explore these concerns further. The CC is expected to report by 4 April 2006.
NOTES
1. The Reference Test — The OFT has a duty to make a reference to the CC if the OFT believes that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation; and the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
2. Under the Enterprise Act 2002 a relevant merger situation is created if two or more enterprises have ceased to be distinct enterprises; and the value of the turnover in the United Kingdom of the enterprise being taken over exceeds £70 million; or as a result of the transaction, in relation to the supply of goods or services of any description, a 25 per cent share of supply in the UK (or a substantial part thereof) is created or enhanced.
3. The CC may extend the 24 week period within which it is required to publish its report by no more than eight weeks if it considers that there are special reasons why the report cannot be published within that period.
4. The text of the decision is available from the Mergers section of this website.
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