Farmers may sue if Wiseman guilty in milk report

Disadvantaged dairy farmers are expected to sue for damages under the new Competition Act if Robert Wiseman, Scotland's biggest milk distributor, is found guilty of alleged market abuses following an investigation by the Competition Commission.

Disadvantaged dairy farmers are expected to sue for damages under the new Competition Act if Robert Wiseman, Scotland's biggest milk distributor, is found guilty of alleged market abuses following an investigation by the Competition Commission.

Stephen Byers, the Secretary of State for Trade and Industry, is considering the unpublished findings of the commission's nine-month inquiry into the supply of fresh processed milk to middle-ground retailers in Scotland. He is expected to make an announcement about the outcome next month.

Rival suppliers have accused Wiseman, which controls an estimated 85 per cent of the Scottish milk market, of abusing its dominance by carrying out anti-competitive practices. Among the allegations submitted to the commission was a claim that Wiseman had enforced market-sharing agreements with small processors in order to stifle competition.

Express Dairies, the Leicester-based company that owns 51 per cent of the Claymore dairy in north-east Scotland, claims Claymore has been subject to such an agreement since 1994. Express said that, within days of acquiring its holding in December 1998, Wiseman began targeting Claymore's customers with low prices, free offers and all-Scotland deals.

A spokesman for Wiseman said: "There were no such market-sharing agreements in place." He said that prior to Express's acquisition of a controlling stake in Claymore, Wiseman had a distribution agreement with the dairy, which meant that Claymore delivered to Wiseman's customers in the Highlands.

The spokesman said Wiseman decided to withdraw the contract following the Express takeover, a situation which led to the resumption of direct dealings with customers.

The Wiseman spokesman said that many of the allegations made by Express and others in the course of the Competition Commission inquiry had been "spurious". He added: "We believe our case is strong and that we will be vindicated."

However, if Wiseman is found to have acted uncompetitively and have hurt other businesses, it could be liable to severe financial penalties. Under the Competition Act, which came into force on 1 March, any party that has suffered a loss as a result of an infringement of the Act is permitted to seek damages.

In addition, the Government is now empowered to impose fines representing up to 10 per cent of a company's turnover.

Wiseman is due to report its half-year results today.