The OFT has fined four supermarkets and five dairy processors a total of £49.51 million for retail price fixing.
The OFT concluded that the companies had co-ordinated increases in the prices consumers paid for certain dairy products in 2002 and/or 2003. The OFT found that in 2002 Arla, Dairy Crest, McLelland, Safeway, Sainsbury's, Tesco and The Cheese Company co-ordinated price increases for cheese. Four of these firms – Asda, McLelland, Sainsbury's and Tesco – were found to have repeated the practice of co-ordinated price increases for cheese in 2003.
The OFT also found that, in a similar infringement of the competition rules, Arla, Asda, Dairy Crest, Safeway, Sainsbury's and Wiseman had colluded in setting milk prices in 2005.
The price co-ordination found by the OFT relates to the indirect exchange by the supermarkets of retail price intentions through dairy processors in so-called 'A-B-C' information exchanges.
Arla was the first undertaking to alert the OFT to the existence of the possible infringement and received 100% immunity from fines under the OFT's leniency programme. All of the companies except Tesco admitted the infringements, agreed to a streamlined procedure and had their fines reduced. Tesco denied the allegations and was fined a total of £10.43m.