The Office of Fair Trading has uncovered a potential price fixing cartel between certain supermarkets and dairies.
The companies under suspicion are supermarkets Asda, Morrisons, Safeway, Sainsbury's and Tesco, and dairies Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman. The parties are accused of having fixed retail prices for milk, butter and cheese, through exchanging confidential information regarding price increases in 2002 and 2003. It is estimated that the illegal collusion will have cost consumers approximately £270 million in inflated prices. The watchdog will now await responses from the parties and comments from interested third parties which will be reviewed before a final decision is taken.
Gordon Downie, competition law partner of Shepherd and Wedderburn, has commented that if found guilty of colluding, the firms could face substantial fines and will also lay themselves open to class actions by consumers. "This is a serious charge. By adopting provisional findings, it seems that the OFT feels it has enough evidence to proceed to a formal decision. If they do, we can expect consumers to band together and claim back the overcharge…Customers overpaid by an estimated £270 million, so the potential value of class actions would be that, and the supermarkets are big enough to make it a worthwhile claim."