Scottish dairies: Chapter I investigation into price-fixing and market-sharing
Office of Fair Trading (OFT) closed Competition Act 1998 case.
Ginger Developments Limited (who purchased the business formerly trading as George L Ballantyne); Grahams Dairies Limited; Quothquan Farms Ltd; A Renfrew & Sons Limited; Scottish Milk Dairies Limited together with First Milk Limited; and Robert Wiseman & Sons Ltd together with Robert Wiseman Dairies plc.
Allegation that processing dairies colluded to fix prices and share markets for the sale of fresh processed milk to middle-ground customers in Scotland.
Chapter I Competition Act 1998.
Case closure summary
In April 2001, the OFT opened a formal investigation into alleged price fixing and market sharing by milk processors in Scotland. This initial investigation was closed in October 2002 as the OFT considered that it had insufficient evidence of an infringement and the case did not look sufficiently promising to warrant further resources being committed.
Following receipt of further information, the OFT re-opened its investigation in May 2003 and, as a result of that investigation, issued a Statement of Objections (SO) in September 2006 setting out its provisional findings that the six processing dairies listed above (the Parties) had committed an infringement. The alleged infringement involved an agreement and/or concerted practice to fix prices and share markets between 2000 and 2003, in contravention of Chapter I of the Competition Act 1998. Not every dairy processor was alleged to have participated in every year or in every aspect of the alleged infringement.
After the OFT issued the SO, the Parties had the opportunity to make representations on the OFT's provisional findings. The OFT received extensive representations from the Parties including new evidence. The OFT reviewed all the representations received and also undertook further investigative enquiries in light of some of the new evidence that had been put forward by some of the Parties.
The OFT has decided, after consultation, that the evidence now in its possession can no longer sustain a finding of infringement as set out in the SO. In addition, again after consultation, the OFT has also decided that further investigation would not successfully enable it to adopt an infringement as set out in the SO and that further investigation of any of the matters raised by the investigation would not be an appropriate use of its resources. In particular, the OFT does not consider it likely that in the foreseeable future significant new evidence relating to the conduct the subject of the SO will come to light. Whilst there remains evidence on the OFT's file of behaviour by some market participants which may potentially have infringed the Chapter I prohibition, further investigation would be required to bring an infringement decision and the OFT does not consider, not least given the passage of time, the nature of the evidence collected to date and the resources that would be required and its other priorities, that it should devote further resources to such further investigation.
Case reference: CE/3117-03