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Media Releases
2007

20 September
2007

OFT investigation into UK supermarkets price fixing of diary good prices

The UK's big four supermarkets could face paying millions of pounds to consumers if found guilty of colluding with dairies to keep the price of dairy goods artificially high, according to competition law expert Gordon Downie of Shepherd and Wedderburn.

The Office of Fair Trading (OFT) today estimated consumers had overpaid for milk, cheese and butter by £270 million as a result of the price-fixing deal.

The OFT named Asda, Tesco, Morrisons, Sainsbury's and processors including Dairy Crest and Arla as being involved. However, they deny the claims.

British Airways was last month fined £120 million by the OFT after the airline admitted colluding to fix the price of fuel surcharges.

Gordon Downie said that if found guilty of colluding, the firms could face similar substantial fines and will also lay themselves open to class actions by consumers.

"This is a serious charge. By adopting provisional findings, it seems that the OFT feels it has enough evidence to proceed to a formal decision. If they do, we can expect consumers to band together and claim back the overcharge," Gordon Downie said.

"Customers overpaid by an estimated £270 million, so the potential value of class actions would be that, and the supermarkets are big enough to make it a worthwhile claim."


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