OFT Issues Supplementary Objections Statement On Dairy Probe

The U.K. Office of Fair Trading, or OFT, Thursday issued a supplementary statement of objections, or SSO, to all of the parties involved in its dairy retail price initiatives investigation, supporting its findings that the parties involved had colluded to increase the retail prices of certain dairy products in 2002 and/or 2003 in breach of the Chapter I prohibition in the Competition Act 1998.

MAIN FACTS:

-The parties that are continuing to contest the OFT's provisional findings are William Morrisons Supermarkets PlC (MRL.LN) and Tesco PLC (TSCO.LN).

-Morrisons is alleged to have indirectly disclosed to and/or exchanged with certain other retailers commercially sensitive information in respect of the retail price of certain liquid milk products in 2002 only.

-Tesco is alleged to have indirectly disclosed to and/or exchanged with certain other retailers commercially sensitive information in respect of the retail price of certain liquid milk products in 2002, fresh liquid milk in 2003, U.K. produced cheese in both 2002 and 2003 and value butter in 2003.

-The other parties involved in the investigation have all admitted their involvement in certain of the alleged anti-competitive practices identified by the OFT in the SO and have agreed to pay individual penalties, or have applied for leniency.

-Morrisons and Tesco now have an opportunity to make written and oral representations in response to the SSO. At this stage it should not be assumed that the law has been broken.

-The OFT will consider any representations, and the evidence as a whole, before reaching any final decision.

-The other parties are: Asda (WMT), The Cheese Company -formerly Glanbia Foods Limited (GL9-DB, Dairy Crest Group PLC (DCG.LN), Lactalis McLelland (in relation to conduct by A McLelland and Son Limited prior to its acquisition by Groupe Lactalis), Safeway (in relation to conduct prior to its acquisition by Morrisons), J. Sainsbury PLC (SBRY.LN) and Robert Wiseman Dairies PLC (RWD.LN), which have all admitted their involvement in certain of the alleged anti-competitive practices identified by the OFT in the SO and have agreed to pay individual penalties; and Arla, which applied for leniency.

-Asda, The Cheese Company (formerly Glanbia Foods Limited), Dairy Crest, Lactalis McLelland (in relation to conduct by A McLelland and Son Limited prior to its acquisition by Groupe Lactalis), Safeway (in relation to conduct prior to its acquisition by Morrisons), Sainsbury's and Wiseman have concluded early resolution agreements with the OFT.

-These parties will receive a significant reduction in the financial penalty that could otherwise be imposed, on condition that they continue to cooperate fully with the OFT's investigation, including providing further evidence as far as reasonably possible.

-Arla will receive complete immunity from financial penalty if it continues to cooperate fully with the OFT's investigation.

 
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; [phone]; [e-mail]