UK supermarkets accused of price fixing

Britain's big supermarkets are accused of price fixing with the dairy industry and could face big fines. The accusations come from the Office of Fair Trading (OFT). Accused supermarkets include Asda, Morrisons, Safeway, Sainsbury's and Tesco; Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman are named as the alleged dairy processors.

The allegations are based on provisional findings of a three-year investigation led by the OFT . The retailers and dairy processors are accused of cooperating with each other on price rises from 2002 to 2003. The price fixing affects milk, butter and cheese and would have cost the consumer an estimated €386 million. OFT director Sean Williams said, "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."

Although the OFT claims to have a large amount of robust evidence, the accused supermarkets deny any involvement and said they would put up a "vigorous defence" against the consumer watchdog’s claim. The companies involved are allowed to respond, and a final verdict is expected next year. If found guilty, they can be fined of up to 10 per cent of their turnover.

Dutch beer brewers Heineken, Grolsch and Bavaria were fined earlier this by the European Commission for price fixing between 1996-1999. Grolsch and Bavaria were fined for €32 and €23 million respectively; Heineken for €219 million.