Supermarkets admit price fixing

Sainbury’s and Asda have admitted price fixing of milk, cheese and butter after a lengthy investigation by the Office of Fair Trading (OFT). The supermarkets, along with a number of dairy processing companies, will pay fines totalling at least £116 million.

The cases against Tesco, Morrisons and dairy processor, Lactis McLelland will proceed after they failed to strike a deal with the OFT.

It announced in September, that it believed that Asda, Tesco, Sainbury’s and Safeway (now owned by Wm Morrison) had engaged in the price fixing of milk, cheese and butter, along with five dairy processing companies.

Dairy processors Dairy Crest, the Cheese Company and Wiseman have also reached agreements with the OFT. All the firms that have admitted liability will face lower fines as a result.

Sainsbury’s, which has agreed to pay £26 million, said that its initiatives were “designed to help British dairy farmers at a time of considerable economic pressure”. Chief executive Justin King says: “We are disappointed that we have been penalised for actions that were intended to help British farmers.”

Asda says that it “regrets what happened” but that its intention had been to “provide more money for dairy farmers”.

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