MAJOR supermarkets and dairies Are Accused Of Price Fixing Scam

Firms could face fines totalling hundreds of millions of pounds for breaking the 1998 Competition Act. Supermarkets have said that they had only raised prices to help farmers but the OFT said its evidence shows farmers did NOT benefit only the supermarkets did.

The OFT believes one supermarket would tell rivals of a coming rise and they would follow. But it is illegal for firms to share that kind of information in this way.

Fines could be as high as ten per cent of each firm’s turnover on dairy produce.

Tesco, Britain’s biggest supermarket had a turnover of £57billion in 2002 and 2003.

Dairy is thought to account for around three per cent, or £1.7billion.

A ten per cent fine based on that is a whopping £170MILLION.

OFT boss Sean Williams said: “This is very serious. We believe supermarkets have been colluding to put up the price of dairy products Shoppers ended up paying more but our evidence suggests farmers didn’t get any more money as a result. Collusion on price is a very serious breach of the law.”

Supermarkets hit back last night. Tesco said: “We will vigorously defend any allegations that we have not acted in the best interests of consumers.”

Asda added: “Price fixing is absolutely against everything we stand for.”

Shadow rural affairs secretary Peter Ainsworth said it was “nonsense” to claim prices rose to help farmers. He said the fixing allegation “will come as no surprise to dairy farmers, who have been struggling for years to make any money.”

What do you think as the customer do you think that the price of dairy products such as milk has gone up to much and do you think that the supermarkets are just trying to increase their profits?

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