OFT decision may make supermarket talks difficult

Supermarkets may be reluctant to engage in talks with farmers as a result of the Office of Fair Trading’s recent decision on milk pricing, a senior Tesco representative has warned.

In September 2007 the OFT accused a number of retailers of colluding to increase the retail price of milk in 2002. A number have since agreed to pay fines totalling more than £100m.

Tesco, however, is still fighting the accusation despite the fact this could leave the company open to an even larger fine.

Lucy Neville-Rolfe, director of corporate and legal affairs, told the NFU Centenary Conference that the consequences of the OFT decision could be damaging for the relationship between farmers and supermarkets.

Tesco sign

Ms Neville Rolfe said she could not understand why the OFT had misunderstood what the supermarket had been trying to achieve.

She asked: “If farmers need help – would we now be prepared to take the risk or would we have to walk on by? I just hope that common sense prevails.”

Ms Neville Rolfe also announced that the supermarket had set itself a new target for the amount of local food it would sell.

This year it expected to sell £400m worth of local produce but by 2011 it expected to sell £1bn worth. “Local is a major opportunity for farmers,” she said.