Mixed reaction to OFT report

Reaction to the Office of Fair Trading’s provisional report into collusion by supermarkets to fix prices in 2002 and 2003 has been flooding in. The following is a selection of the comment:

“The fact the OFT believes the supermarkets have a case to answer will come as no surprise to dairy farmers who have been struggling for years. Any suggestion that the retail price of milk was increased to benefit farmers is nonsense. Over the period covered by the inquiry, retail prices increased but farm gate prices fell and supermarket margins rose.” Peter Ainsworth, Conservative shadow DEFRA secretary

“There was no collusion between supermarkets over milk prices and no sharing of confidential information. Some individual retailers raised the prices charged to customers in an attempt to ensure farmers received more and were able to continue in business’ so ensuring future milk supplies. A proportion of the increases reached farmers; some appears to have stuck to the sides on the way down the supply chain.”  Kevin Hawkins, British Retail Consortium director general

“Contrary to the claims of the British Retail Consortium, the big supermarkets have been caught red handed charging excessively high prices for dairy products to consumers. The government must now use the full force of competition law to ensure there is no market rigging that will hit either consumers or farmers, who have long complained about the low price they receive for milk.” Chris Huhne, Liberal Democrat shadow DEFRA secretary

“Dairy prices for consumers in the UK over the last 10 years have been extremely competitive and remain so. The competition between the main supermarkets is well known to consumers. Price rises have generally been below the rate of inflation and dairy products continue to be very good value. This OFT report refers to events five years ago and any price rises then reflected the major cost and income difficulties being encountered by dairy farmers.” Dairy UK

“The OFT has at last confirmed our suspicions about what appears to be a glaring example of corporate greed by the supermarkets and dairies, costing consumers hundreds of millions of pounds. While they have been raking in high prices for dairy products they have been stubbornly paying farmers dwindling returns. For example, in 2001 the farmgate price for a litre of milk was 18.47p and the retail price was around 43p.”  Farmers Union of Wales

”We note that the OFT will not be in a position to decide if the law has been breached until it has received and reviewed the parties’ responses. We look forward to reviewing the detail within the Statement of Objections, and to defending our position.” Robert Wiseman Dairies

“This is a very complex case and Arla is still in the process of reviewing the details and will submit its views to the OFT in due course. Arla is fundamentally opposed to any practice that is unfair and takes stringent steps to ensure nationally applicable laws are followed.” Arla Foods