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Tesco fights  price-fixing fine from OFT

Tesco has threatened legal action after being fined £10 million by the Office of Fair Trading as a result of an inquiry into the price fixing of cheese products between 2002 and 2003. The supermarket has also called for the regulator to be dismantled.

GENERAL MERCHANDISE

Tesco fights price-fixing fine from OFT

Tesco has threatened legal action after being fined £10 million by the Office of Fair Trading as a result of an inquiry into the price fixing of cheese products between 2002 and 2003. The supermarket has also called for the regulator to be dismantled.

A seven year investigation resulted in nine retailers facing penalties totalling almost £50 million following their collusion over pricing which the OFT said infringed the Competitions Act. The OFT has stated that consumers spent an extra £270 million on dairy goods as a result of the collusion.

But Tesco denies that it colluded with the other retailers saying today that it “reacted with surprise and dismay" over the ruling which was “entirely without substance”. 

The other retailers, Arla, Asda, Dairy Crest, McLelland, Safeway, Sainsbury's, The Cheese Company, and Wiseman, all received more lenient penalties after admitting liability.

Lucy Neville-Rolfe, Tesco's director of corporate and legal affairs, said: "We surely have now reached the stage where the absurdity of the OFT operating as investigator, prosecutor and judge cannot be allowed to continue."

Neville-Rolfe continued: "We are disheartened and disturbed that the OFT continues to pursue this costly and time consuming case at the expense of both the tax payer and UK business.

"This is all the more surprising given that the OFT itself said that 'competition in the supermarket sector is generally intense and has delivered significant benefits to shoppers'. 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."

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