Price Fixing Probe Against Six Scottish Dairies Dropped
After a seven-year investigation, the UK’s Office of Fair Trading dropped a case pending against six Scottish dairies accused of price fixing. The OFT ruled there was a lack of evidence in the case.
The OFT began investigating in June 2000 after complaints of price-fixing in the milk industry from Express Dairies, which was later sold to Arla, a rival to the dairies under investigation. In 2002, the OFT found the complaints were unfounded. Express Dairies appealed, and the OFT began another investigation in July 2003. That case was closed and was later reopened in September 2006.
In 2006, the OFT released a Statement of Objections, which provisionally found the dairies had engaged in price fixing and market sharing. The OFT’s SO indicated that between 2000 and 2003, the dairies shared price information, coordinated a series of price increases, and colluded over plans to not compete for each other’s customers. The allegations related to the “middle ground” market for milk in Scotland, which includes customers such as schools, small stores, hotels and cafes, but excludes major supermarkets.
However, after continuing investigations, including the dairies’ responses to the SO, the OFT found there was not sufficient evidence to proceed to an infringement decision as set out in the original SO. The OFT noted that continuing with the investigation was an improper use of resources.
The dairies being investigated claimed Arla had entered the milk market in Scotland, found it was already being sufficiently served, so decided to hurt the competition by filing a complaint with the OFT. Arla also filed a £ 15 million suit with the Court of Session, which remains unsettled.
The largest independent dairy in Scotland, Graham’s Dairy, noted that since the investigation is over, it can now proceed with a £ 1 million investment program in new product development. The program had previously been put on hold while the investigation was ongoing. The dairy noted that it spent over £ 500,000 in legal fees during the course of the investigation. The other dairies involved also had significant legal fees. The heads of two of the dairies felt they had been vindicated, but expressed a desire for the OFT to provide more closure by commenting on the quality of the claims.
The OFT observed that although this investigation is complete, it is unconnected to an ongoing investigation into collusion between certain UK dairy processors and certain large supermarkets, which is still continuing.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
The OFT began investigating in June 2000 after complaints of price-fixing in the milk industry from Express Dairies, which was later sold to Arla, a rival to the dairies under investigation. In 2002, the OFT found the complaints were unfounded. Express Dairies appealed, and the OFT began another investigation in July 2003. That case was closed and was later reopened in September 2006.
In 2006, the OFT released a Statement of Objections, which provisionally found the dairies had engaged in price fixing and market sharing. The OFT’s SO indicated that between 2000 and 2003, the dairies shared price information, coordinated a series of price increases, and colluded over plans to not compete for each other’s customers. The allegations related to the “middle ground” market for milk in Scotland, which includes customers such as schools, small stores, hotels and cafes, but excludes major supermarkets.
However, after continuing investigations, including the dairies’ responses to the SO, the OFT found there was not sufficient evidence to proceed to an infringement decision as set out in the original SO. The OFT noted that continuing with the investigation was an improper use of resources.
The dairies being investigated claimed Arla had entered the milk market in Scotland, found it was already being sufficiently served, so decided to hurt the competition by filing a complaint with the OFT. Arla also filed a £ 15 million suit with the Court of Session, which remains unsettled.
The largest independent dairy in Scotland, Graham’s Dairy, noted that since the investigation is over, it can now proceed with a £ 1 million investment program in new product development. The program had previously been put on hold while the investigation was ongoing. The dairy noted that it spent over £ 500,000 in legal fees during the course of the investigation. The other dairies involved also had significant legal fees. The heads of two of the dairies felt they had been vindicated, but expressed a desire for the OFT to provide more closure by commenting on the quality of the claims.
The OFT observed that although this investigation is complete, it is unconnected to an ongoing investigation into collusion between certain UK dairy processors and certain large supermarkets, which is still continuing.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
Labels: eu competition law, eu law, european antitrust lawsuits, scottish dairies
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