'Dairy prices fixed' claim
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. 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. Shrewsbury MP Daniel Kawczynski, chairman of the all-party group for dairy farmers, was in a jubilant mood, saying: "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." Read the full story in today's Shropshire Star
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
