Morrisons to 'sue OFT'Chain responding over dairy probe, reports say

12 February 2008

Shopping

Supermarket chain Morrisons is taking legal action against the Office of Fair Trading (OFT) over the naming of the retailer in a dairy price-fixing probe, reports claim.

Morrisons is lodging a libel suit, accusing the OFT of damaging its reputation in a statement issued by the watchdog, which included the supermarket in a list of firms provisionally found guilty of colluding to increase dairy prices, according to the Financial Times.

The supermarket declined to comment, but has always denied the price-fixing allegations.

Investigation

The OFT said only that there was 'ongoing litigation relating to the content of a press release' and confirmed that there was a continuing investigation into alleged collusion by Morrisons concerning milk prices in 2002.

Asda, Sainsbury's and Safeway - in relation to activities prior to its takeover by Morrisons - agreed to pay combined fines of more than £116 million after admitting fixing the price of milk, cheese and butter during 2002 and 2003.

Morrisons said at the time of the provisional findings in September that it did not believe it was involved in any price collusion.

Morrisons

It said in a statement that objections will be made that Morrisons 'should not be a part of this inquiry and that Morrisons inherited from Safeway a matter not of its making or doing'.

The OFT issued a clarification of its statement of objections made last September, stressing that the provisional findings relating to Morrisons concerned milk products in 2002 only. It also said the findings did not allege that Morrisons had been warned by the OFT that its conduct might be anti-competitive.

The price-fixing scandal is thought to have cost consumers around £270 million. But many of those supermarkets and dairy groups involved claim that the measures were designed to help dairy farmers at a time when they were under financial strain, following the devastating foot-and-mouth outbreak in 2001.

Morrisons' reported legal action comes in what is expected to be a tough week for the supermarket sector. The Competition Commission is also expected to publish possible 'remedies' to address the findings from its long-running inquiry into the grocery market.

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