Dairy market probe cost processors thousands

An eight year price-fixing investigation conducted by the Office of Fair Trading (OFT) has cost dairy manufacturers hundreds of thousands of pounds.

The OFT has finally dropped an investigation into six Scottish dairies. These include Grahams, Scottish Milk Dairies, Quothquan, Renfrew, Wiseman and Ballantyne.

Graham Dairies said that the investigation had cost them about half a million pounds. And Wiseman said that it did not know the exact figure, but estimated that it was hundreds of thousands of pounds.

“While we are happy that the investigation is now over, it has cost us both money and time which are unrecoverable,” said Graeme Jack communications director at Robert Wiseman Dairies.

“This decision brings to an end a long running investigation conducted by the OFT, which arose primarily as a result of allegations made by a competitor Claymore Dairies, a subsidiary of Arla Foods.”

The initial OFT investigation relates to the “middle-ground” market in Scotland, which consists of customers such as schools, shops, cafes and hotels, but excludes major supermarkets and doorstep customers - between 2000 and 2003. Its provisional finding was that Wiseman and Graham’s were involved in price-fixing for each of the four years, Scottish Milk Dairies and Renfrew were involved for three years, Quothquan’s for two years and Ballantyne for one year.

In a statement the OFT said: “Although the evidence at the time was sufficient for the OFT to make a provisional finding of an infringement, as a result of continuing investigations - which included consideration of the parties’ responses to the Statement of Objections - the OFT no longer considers that it has sufficient evidence to proceed to an infringement decision.”

The watchdog concluded that continuing with the investigation would be an “inappropriate use of its resources”