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Consumer law: Tesco denies price-fixing dairy products

While several dairy firms and supermarkets admitted to colluding over the price of dairy products, forcing consumers to pay more during 2002-3, Tesco vehemently denies being involved in the price fixing and has threatened legal action.

The Office of Fair Trading made an inquiry into the prices of dairy products and found that Arla, Asda, Dairy Crest, McLelland, Safeway, Sainsbury's, The Cheese Company, Wiseman and Tesco all infringed the Competition Act.

A total of about £50million in fines has been charged.

Eight of those companies admitted liability, but Tesco reacted with "surprise and dismay" to the ruling and has denied colluding with the other companies, saying that the ruling "is entirely without substance".

A Tesco spokeswoman said: "This is all the more surprising given that the OFT itself said that 'competition in the supermarket sector is generally intense and has delivered significant benefits to shoppers'. We have always said we did not collude on prices on cheese and we stand firm in our rebuttal of these ongoing allegations. We will continue to defend our position vigorously, through the courts if necessary."

During 2002-3, the OFT claim that price fixing meant that consumers paid an extra £270million. An extra 3p was added to each pint of milk and 15p per half-pound of butter was added.

By admitting liability, the eight companies all received more lenient fines from the OFT. But Tesco has been served with a £10million fine.

Related links:
Read more on the story (ThisIsLondon)
Read about price fixing and the law (FindLaw)
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