Tesco enraged by £10m fine from OFT

Supermarket has consistently protested its innocence in the row over dairy market price fixing and called yesterday for a complete overhaul of the regulatory system

Tesco came out fighting yesterday, effectively calling for the Office of Fair Trading to be broken up after the watchdog slapped a £10m fine on the supermarket chain for colluding to fix cheese prices between 2002 and 2003.

The UK's biggest grocer reacted with "surprise and dismay" to the OFT's ruling that it had colluded with suppliers and other retailers, adding that the judgement was "entirely without substance".

The OFT conducted a seven-year inquiry into the matter, which it has concluded by fining eight parties a total of £49.81m for infringing the Competition Act of 1998.

While whisteblower Arla was given complete immunity from a fine, Asda, Dairy Crest, McLelland, Safeway (prior to its acquisition by Morrisons in 2004), Sainsbury's,, The Cheese Company and Wiseman received more lenient fines after admitting liability. But Tesco has always contested the ruling and was fined £10.43m.

John Fingleton, the OFT's chiefexecutive, said: "This decision sends a strong signal to supermarkets, suppliers and other businesses that the OFT will take action and impose significant fines where it uncovers anti-competitive behaviour aimed at increasing the prices paid by consumers."

The OFT judged the nine parties colluded to rig the price of cheese in 2002 and 2003, as well as fresh liquid milk in the latter year, which ended up costing consumers an extra £270m. Some grocers, such as Sainsbury's and Asda, were involved in all three activities, while Wiseman was embroiled in just the 2003 milk inquiry.

However, Lucy Neville-Rolfe, Tesco's director of corporate and legal affairs, 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 UK business."

She added: "We have always said we did not collude on prices on cheese and we stand firm in our rebuttal of these ongoing allegations. We will continue to defend our position vigorously, through the courts if necessary."

Tesco pointed out that the OFT last year dropped its allegation about collusion over milk prices in 2002 and butter in 2003 against all parties, as well as its 2003 milk allegation against the grocery giant.

The price fixing investigation followed a sustained and very public campaign by dairy farmers between 2001 and 2003 demanding higher milk prices at the farm gate. Tesco said the OFT had made its decision on the pricing of cheese, despite the grocer's insistence – backed by "firm evidence" – that it didn't collude with other retailers.

"We surely have now reached the stage where the absurdity of the OFT operating as investigator, prosecutor and judge cannot be allowed to continue," Ms Neville-Rolfe said. "The Government's plans for the new competition regime must address this anomaly, in the interests of the consumer and the business community."

The Government plans to merge the Competition Commission and the OFT to create a single agency, the Competition and Markets Authority.

Tesco said it has two months todecide whether it would appeal, but said "our expectation is that we will". Such a hearing would take place at the Competition Appeal Tribunal and the appeal process could take up to a year.

News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsSchool leaver's pic YouTube video features staging of a playground gun massacre
Travel
travel
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
PROMOTED VIDEO
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
Morrissey pictured in 2013
people
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Travel
travel
News
Robyn Lawley
people
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
people
News
i100  ... he was into holy war way before it was on trend
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
News
people
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain