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Supermarkets 'fixed dairy prices' Supermarkets 'fixed dairy prices'
(10 minutes later)
Large supermarkets and dairy processors have colluded to keep the price of dairy goods artificially high, the Office of Fair Trade (OFT) has found. The UK's big four supermarkets and dairies colluded to keep the price of dairy goods artificially high, the Office of Fair Trade (OFT) has found.
The price-fixing deal - which covered 2002 and 2003 - led to consumers overpaying for milk, cheese and butter by an estimated £270m, the OFT said. The price-fixing deal led to consumers overpaying for milk, cheese and butter by an estimated £270m, the OFT said.
Asda, Tesco, Morrisons, Sainsbury's and processors including Dairy Crest and Arla were involved, the watchdog said.
It added stores and processors had already been warned the practice would limit competition and raise prices.It added stores and processors had already been warned the practice would limit competition and raise prices.
"This is a very serious case," the watchdog said. "This is a very serious case," said OFT executive director Sean Williams.
"This kind of collusion on price is a very serious breach of the law," said OFT executive director Sean Williams. "This kind of collusion on price is a very serious breach of the law."
"Businesses should understand that where we find evidence of this kind of anti-competitive activity we will use the powers at our disposal to punish the companies involved and to deter other businesses from taking such actions." 'Deterrent'
It added it had written to Asda, Morrisons, Safeway, Sainsbury and Tesco, as well as dairy processors Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman setting out its findings. Mr Williams added that the watchdog would ensure it used its powers to punish such behaviour and "deter other businesses from taking such actions".
It added it had written to Asda, Morrisons, Safeway, Sainsbury's and Tesco, as well as dairy processors Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman setting out its findings.
It is now awaiting their responses to the claims, and any objections.
Following an investigation the OFT said it had found the groups had shared "highly commercially sensitive information, including details of the levels of price increases, over a two year period of 2002 and 2003".
The watchdog said it was "committed to sorting out the case as soon as possible," and hoped to issue a final decision by late 2008, if not earlier.