Tesco to contest OFT fine

From the Morning Star



Tesco threatened to take legal action against a competition watchdog today that gave the supermarket giant a £10 million fine for its alleged role in a dairy price-fixing scandal.



Tesco was among nine firms that the Office of Fair Trading judged to have colluded to rig the price of cheese and milk in 2002 and 2003.



The penalties imposed by the OFT total nearly £50m but the scandal is thought to have hit their customers' pockets to the tune of £270m.



Originally the OFT had intended to fine guilty parties more than £116m but it scaled back the penalties after a period of consultation.



Supermarket chains Asda, Sainsbury's and Safeway and dairy processors Arla, Dairy Crest, McLelland, the Cheese Company and Wiseman all received lenient fines after admitting liability.



Left Economics Advisory Panel co-ordinator Andrew Fisher said that it was not hard to see where the real looters are.



He said: "It is very welcome that the OFT has decided to act on behalf of consumers who are being hit with outrageous price hikes by energy companies, supermarkets and banks.



"As LEAP highlighted in its March report, British supermarkets have hiked prices at a higher level than their European counterparts. They are looting people's wages to maintain their fat-cat profits. It's a rich irony that these fat cats are overcharging for cream."



But Tesco stands alone in denying it had anything to do with the price fixing of dairy products stating it will defend its position "vigorously" and "through the courts if necessary."



The supermarket's director of corporate and legal affairs Lucy Neville-Rolfe said: "We are disheartened and disturbed that the OFT continues to pursue this costly and time-consuming case at the expense of both the taxpayer and British business.



"We have always said we did not collude on prices on cheese and we stand firm in our rebuttal of these ongoing allegations."



But the OFT defended its decision and the watchdog's chief executive John Fingleton said the fines send "a strong signal" to supermarkets, suppliers and other businesses that adopt anti-competitive tactics.