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RNS Number : 1447W
Office of Fair Trading
23 July 2009
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Office of Fair Trading Statement for issue of Dairy SSO
The OFT has today issued a supplementary statement of objections (SSO) to all of
the parties involved in its Dairy Retail Price Initiatives investigation. The
SSO sets out additional evidence in support of the OFT's provisional findings in
its statement of objections (SO) issued on 20 September 2007 that the parties
involved in the investigation had colluded to increase the retail prices of
certain dairy products in 2002 and/or 2003 in breach of the Chapter I
prohibition in the Competition Act 1998 (see notes 1 and 3).
The parties that are continuing to contest the OFT's provisional findings are
Morrisons and Tesco. The other parties involved in the investigation have all
admitted their involvement in certain of the alleged anti-competitive practices
identified by the OFT in the SO and have agreed to pay individual penalties, or
have applied for leniency (see note 2).
Morrisons and Tesco now have an opportunity to make written and oral
representations in response to the SSO. At this stage it should not be assumed
that the law has been broken. The OFT will carefully consider any
representations, and the evidence as a whole, before reaching any final
decision.
NOTES
1.The Competition Act 1998 prohibits agreements, practices and conduct that may
have a damaging effect on competition in the UK. The Chapter I prohibition
covers anti-competitive agreements and concerted practices, that have the object
or effect of preventing, restricting or distorting competition in the UK or a
part thereof.
2. The other parties are: Asda, The Cheese Company (formerly Glanbia Foods
Limited), Dairy Crest, Lactalis McLelland (in relation to conduct by A McLelland
and Son Limited prior to its acquisition by Groupe Lactalis), Safeway (in
relation to conduct prior to its acquisition by Morrisons), Sainsbury's and
Wiseman, which have all admitted their involvement in certain of the alleged
anti-competitive practices identified by the OFT in the SO and have agreed to
pay individual penalties (see note 4); and Arla, which applied for leniency (see
note 5)
3.The SO made the following infringement allegations:
* Arla is alleged to have facilitated the exchange of commercially sensitive
information between certain retailers in respect of the retail price of certain
liquid milk products in 2002 and fresh liquid milk 2003.
* Dairy Crest is alleged to have facilitated the exchange of commercially
sensitive information between certain retailers in respect of the retail price
of UK produced cheese in 2002 and in respect of fresh liquid milk and value
butter in 2003.
* Wiseman is alleged to have facilitated the exchange of commercially sensitive
information between certain retailers in respect of the retail price of fresh
liquid milk in 2003 only.
* The Cheese Company (formerly Glanbia Foods Limited) is alleged to have
facilitated the exchange of commercially sensitive information between certain
retailers in respect of the retail price of UK produced cheese in 2002 only.
* Lactalis McLelland (as A McLelland and Son Limited, prior to its acquisition by
Groupe Lactalis) is alleged to have facilitated the exchange of commercially
sensitive information between certain retailers in respect of the retail price
of UK produced cheese in both 2002 and 2003.
* Asda is alleged to have indirectly disclosed to and/or exchanged with certain
other retailers commercially sensitive information in respect of the retail
price of certain liquid milk products in 2002, fresh liquid milk in 2003 and UK
produced cheese in both 2002 and 2003.
* Morrisons is alleged to have indirectly disclosed to and/or exchanged with
certain other retailers commercially sensitive information in respect of the
retail price of certain liquid milk products in 2002 only.
* Safeway (prior to its acquisition by Morrisons) is alleged to have indirectly
disclosed to and/or exchanged with certain other retailers commercially
sensitive information in respect of the retail price of certain liquid milk
products in 2002, fresh liquid milk in 2003, UK produced cheese in 2002 and
value butter in 2003. The OFT's provisional findings in respect of Safeway
relate to conduct that occurred prior to its acquisition by Morrisons.
* Sainsbury's is alleged to have indirectly disclosed to and/or exchanged with
certain other retailers commercially sensitive information in respect of the
retail price of certain liquid milk products in 2002, fresh liquid milk in 2003
and UK produced cheese in both 2002 and 2003.
* Tesco is alleged to have indirectly disclosed to and/or exchanged with certain
other retailers commercially sensitive information in respect of the retail
price of certain liquid milk products in 2002, fresh liquid milk in 2003, UK
produced cheese in both 2002 and 2003 and value butter in 2003.
4.Asda, The Cheese Company (formerly Glanbia Foods Limited), Dairy Crest,
Lactalis McLelland (in relation to conduct by A McLelland and Son Limited prior
to its acquisition by Groupe Lactalis), Safeway (in relation to conduct prior to
its acquisition by Morrisons), Sainsbury's and Wiseman have concluded early
resolution agreements with the OFT. These parties will receive a significant
reduction in the financial penalty that could otherwise be imposed, on condition
that they continue to cooperate fully with the OFT's investigation, including
providing further evidence as far as reasonably possible. See press releases
http://www.oft.gov.uk/news/press/2007/170-07 and
http://www.oft.gov.uk/news/press/2008/22-08 for details.
5.Arla will receive complete immunity from financial penalty if it continues to
cooperate fully with the OFT's investigation.
6.A statement of objections, including a supplementary statement of objections,
gives notice of a proposed infringement decision under the Competition Act 1998
to the parties involved. It sets out the facts on which the OFT relies, the
objections raised by the OFT, the action it proposes to take and the reasons for
it.
This information is provided by RNS
The company news service from the London Stock Exchange
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