Lengthy dairy probe '"reality check" for OFT

By Elaine Watson

- Last updated on GMT

Related tags: Milk, Oft

The amount of time and money Office of Fair Trading (OFT) officials have spent pursuing their investigation into alleged price fixing in the dairy industry is “quite ridiculous”, according to a leading competition lawyer.

Bernardine Adkins, anti-trust partner at Wragge & Co, told FoodManufacture.co.uk that the seven-year investigation had proved to be “a reality check”​ for the OFT.

She added: “The length of time the OFT has spent on this and other related investigations into the sector is quite ridiculous. It has just been going on for far too long. The OFT is aware of this problem but nothing has happened to make things move any faster.

“What it also shows is that these kinds of cases are very difficult to prove.”

However, the fact that the fines levied from firms caught up in the probe had been reduced from £116m to £70m was not in itself a source of embarrassment or an admission of failure on the part of the OFT, she claimed.

“They would argue that this reflects the fact that they have been very efficient. For example, the fact that Tesco is not now contesting the OFT’s claim that it breached competition law by exchanging commercially sensitive information with cheese suppliers in 2002/3 means it can save money.”

Cartel cases “notoriously hard to unravel”

Other competition lawyers said the fact that these cases were so difficult to prove and yet the firms in question had still ended up paying substantial fines proved that the investigation had been in the public interest, and would serve as a lesson to the industry.

Meanwhile, the timescale was “not unreasonable​” given the complexities of the investigation, added one partner at a legal firm specialising in competition law: “These cases are notoriously hard to unravel.”

According to the OFT, supermarkets and processors colluded to increase the retail prices of milk, value butter and UK-produced cheese through the sharing of commercially sensitive information in 2002-3. Arla Foods, as the ‘whistleblower’ in the case, has not had to pay any penalties.

Related topics: Dairy, Legal

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