OFT abandons Scottish dairy probe

Graham's Dairies said the investigation had cost the business �500,000

The Office of Fair Trading has dropped an investigation into six Scottish dairies accused of price fixing.

The probe began in 2006 to assess the activities of Grahams, Scottish Milk Dairies, Quothquan, Renfrew, Wiseman and Ballantyne over a four-year period.

The OFT had alleged collusion on pricing, price rises and arrangements not to compete.

In a statement, the watchdog said there was insufficient evidence against the firms.

It added that no further action would be taken.

In September 2006, the OFT issued a Statement of Objections (SO), which provisionally found the companies had engaged in price fixing and/or market sharing.

We made it clear from the outset that allegations of impropriety on our part were entirely without foundation Graham's Dairies

The allegations, which dated from 2000 and 2003, related to the "middle-ground" market in Scotland, which consists of customers such as schools, shops, cafes and hotels, but excludes major supermarkets and doorstep customers.

The OFT's provisional finding was that Wiseman and Graham's were involved for each of the four years, Scottish Milk Dairies (SMD) and Renfrew were involved for three years, Quothquan's for two years and Ballantyne for one year.

Both Renfrew and SMD had sold their milk processing businesses to Graham's by the time the investigation began, but the OFT said the sellers remained liable for their actions between 2000 and 2003.

It found provisionally that all six firms were involved in price-fixing and all but Ballantyne's were involved in market-sharing.

'Without foundation'

However, the watchdog now maintains that although the evidence at the time was sufficient for them to make a "provisional finding of an infringement", they "no longer" considered that there was sufficient evidence to proceed to an infringement decision as set out in the original SO.

The organisation concluded that continuing with the investigation would be an inappropriate use of its resources.

In response to the news, Robert Graham, head of Graham's Dairies, based in Bridge of Allan near Stirling, and the UK's seventh biggest producer, said the investigation had cost his business �500,000.

Announcing plans to invest �1m in the business, Mr Graham added: "We are delighted that the OFT has closed the case which has been an emotional burden to everyone involved with Graham's for the past seven years.

"We made it clear from the outset that allegations of impropriety on our part were entirely without foundation and worked with the OFT throughout the process to ensure the reputation of our family business remained intact."

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