OFT drops part of dairy investigation

The Office of Fair Trading has dropped a large chunk of its investigation into the dairy industry and reduced the level of fines it had applied on some retailers and processors.

In 2007 and 2008, the OFT concluded early resolution agreements with a number of parties who ‘accepted liability in principle’ for a breach of competition law in relation to the liquid milk market in 2002 and butter market in 2003.

But in a statement issued on Friday (30 April), the OFT said that there was insufficient evidence to suggest that there was anti-competitive price-fixing during these years.

“As a result, the individual penalties that a number of early resolution parties had agreed to pay will be reduced.”

In 2007, the watchdog reached agreements with seven companies – Asda, Dairy Crest, J Sainsbury, Wiseman, Safeway, The Cheese Company and Lactalis McLelland – which were fined a total of over £100m.

The penalties have now been reduced to a total of £70m.

The OFT has also concluded that the evidence is insufficient to support an infringement finding against Tesco with regard to three alleged dairy initiatives relating to liquid milk in 2002 and 2003 and value butter in 2003.

Morrisons has been dropped from the dairy investigation, due to conclude in summer 2010, completely.