Supermarkets Sainsbury’s and Asda have been fined millions for price fixing by the Office of Fair Trading (OFT). Cases against Tesco and Morrisons are ongoing, as they are challenging the findings, but total fines have reached £116m so far.
Milk and cheese prices were fixed by Sainsbury’s and Asda, increasing prices for shoppers by 3p per pint of milk and 15p per quarter-pound of butter.
Price fixing cost shoppers an estimated £270m.
Price fixing took place between 2002 and 2003, and violates the Competition Act of 1998, which prohibits any agreements that may adversely affect competition.
Sainsbury’s fine is £26m, although it issues a statement saying that the price ‘initiatives’ were ‘designed to help British dairy farmers at a time of considerable economic pressure and public debate about whether farmers were getting a fair price for their products.’
Asda’s fine has not been disclosed, and it said in a statement that there were ‘regrets’ over the matter.
Safeway has admitted to fixing the price of milk and cheese, and it has also admitted to fixing the price of butter. Safeway has since been bought by Morrisons.
Dairy Crest, the Cheese Company, and Wiseman Dairies have also reached an agreement with the OFT, with Dairy Crest being fined £9.4m, and Wiseman Dairies, £6.1m.
Wiseman Dairies said that ‘penny of additional revenues paid to Wiseman was passed directly to our suppliers’.
OFT fines imposed on the supermarkets and producers Asda, Dairy Crest, Safeway, Sainsbury’s, The Cheese Company and Wiseman Dairies total £116m so far.