Britain’s biggest supermarkets and processors were today accused of running a dairy cartel - fixing the prices of milk, butter and cheese which cheated consumers out of £270 million.The Office of Fair Trading said it believed the sharing of highly commercially sensitive information between the companies created an over-inflated price, none of which went back to the dairy farmer.
Supermarkets Asda, Morrisons, Safeway, Sainsbury’s and Tesco, along with dairy processors Arla, Dairy Crest, which has a base at Crudgington, near Newport, Lactalis McLelland, Oswestry’s The Cheese Company and Robert Wiseman, which recently opened a dairy in Market Drayton, could face unprecedented fines.
Sean Williams, executive director of OFT, said: “This is a very serious case. We believe supermarkets have been colluding to put up the price of dairy products. Consumers have lost out to the tune of hundreds of millions of pounds.”
He said the alleged sharing of information restricted the competitive process in the dairy sector, leading to higher prices.
Shrewsbury MP Daniel Kawczynski, chairman of the all-party group for dairy farmers, was in a jubilant mood. “To me it has been crystal clear that there was something intrinsically, fundamentally flawed in the process whereby consumers were paying a high price for their milk yet Shropshire dairy farmers were going out of business.
“But for the OFT to have teeth it must follow up this report with real concrete penalties. If it doesn’t, the supermarkets and processors will only carry on abusing the system.”
Shropshire WI chairwoman Rosemary Hamilton, who chaired the Great Milk Debate in April which called for farmers to get a greater share of the milk price, said supermarkets were “not to be trusted”.
She said: “Our confidence in the supermarkets is being slowly but surely eroded.”
A spokeswoman for The Cheese Company, on Maesbury Road Industrial Estate in Oswestry, said: “We are not commenting until we have looked at the findings.”
Sean Rickard, a consultant to the dairy industry and former chief economist at the National Farmers’ Union, said the humble farmer never got a penny.
By Rural Affairs Editor Nathan Rous
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10 Comments
no big deal
It is not the only thing they conspire to keep artificially high !
Will they be punished?
Not a chance!!!
And to think all the supermarket chains have our (the customer) interests at heart - my dreams have been shattered
I can’t believe the price of 2 litres of milk in Asda £1.34!
It’s cheaper for me to get my milk from my local corner shop which i have been doing.
More to the point why should they be punished?
These are not non-profit organisations we are discussing, but businesses that are there to make money. We may not always agree with the ethics, but if we are honest with ourselves and if you were the CEO of any of these companies then you too would seek to increase profits to keep your shareholders happy!
If so many dairy farmers are going out of business then where is our milk coming from? Things do not seem to be adding up here. Businesses in all sectors fail, not always down to price but bad management. Maybe the dairy farmers should look at diversifying? ALL smaller buinesses can suffer due to larger companies and consortiums using unethical methods, but rather than moan about it there are a few that look for resolutions and thrive as a result!
I hope the farmer’s can find a way to sue these companies and claim compensation!
bet you didnt know that milk has been watered down for twenty years to boost profits for all concerned.
Get milk from the milkman. Cut out the supermarkets, employ a local person, cut down on food miles, reuseable containers (bottles), fresher milk, you don’t travel to get it etc etc.
Get a cow and drink from the fresh warm udder, careful not to bite though… cows hate that, and be careful where you put your head!