OFT issues provisional decision against Scottish processing dairies

The OFT has provisionally found that six Scottish dairies entered into an agreement and/or concerted practice in the supply of fresh processed milk to 'middle ground' customers, in breach of competition law, over a four year period from 2000 to 2003.

The OFT has issued a statement of objections setting out its provisional findings to the milk processing dairies concerned (Ballantyne, Grahams, Quothquan, Renfrew, Scottish Milk Dairies and Wiseman). The main provisional finding is that the dairies engaged in price fixing by sharing pricing information and co-ordinating a series of price increases between them and colluded over arrangements not to compete for each others' customers, a form of market sharing. Price fixing and market sharing are both forms of conduct which infringe Chapter I of the Competition Act 1998.

The alleged infringement relates to the 'middle ground' market sector in Scotland which consists of customers such as schools, shops, cafes and hotels but excludes the big supermarkets and doorstep customers.

The OFT has now given the parties the opportunity to make written and oral representations on the statement of objections, which the OFT will take into account before making its final decision as to whether the Chapter I prohibition has been infringed and as to the appropriate amount of any penalties the OFT may decide to impose on each of the firms concerned.

No assumption should be made at this stage that there has been an infringement of competition law. The OFT will not be in a position to decide if the law has been breached until it has received and reviewed the parties' responses to the statement of objections and any comments from interested third parties.