A SERIOUS OFFENCE-THE OFT’S LETTER-Mark Kram

I read with interest and concern your report “Industry gets behind 3p/litre milk price hike” (News, 7 Jan).

It refers to the NFU and FFA having “more or less got verbal agreement from everyone we have spoken to” to an increase in milk prices. The NFU is also quoted as not thinking “the OFT would be a problem”. It is wrong to make this assumption and it is important to sound a warning about agreements that increase prices.

Price-fixing agreements are among the most serious breaches of competition law. Such agreements need not be formal or written down. Verbal agreements and informal understandings among competitors about how they can behave can also break the law. If the OFT finds an agreement that breaches the law, the parties can be subject to substantial fines – up to 10% of their worldwide turnover.

 While we fully appreciate dairy farmers” current difficulties, these cannot excuse price-fixing, which is a serious offence. The industry needs to operate within the law. To do otherwise would reflect badly on British farming as well as making those concerned liable to action by the OFT.

Mark Kram, Office of Fair Trading, Head of News