Supermarket price-fixing costs shoppers £270 million12 August 2011
Tesco, Asda, Sainsbury's and Safeways (which is now part of Morrisons) have been found guilty of fixing the price of dairy products.
It isn't only shoppers that lose out. Even while supermarkets were keeping the prices high and making huge profits they weren't paying farmers fairly.
The Office of Fair Trading (OFT) found shops and processors had fixed the prices of milk and cheese in 2002 and 2003.
They imposed fines of nearly £50 million.
This decisions sends a strong signal to supermarkets, suppliers and other businesses that the OFT will impose significant fines where it uncovers anti-competitive behaviour aimed at increasing the prices paid by consumers.
John Fingleton, OFT, Chief Executive
Damaging farmers
There's no doubt that farmers need a fairer price for their produce.
But while supermarkets make huge profits, farmers are getting paid so little that many are going out of business. Farmers often receive less than half the money paid for a pint of milk. Meanwhile Tesco posted profits of £3.8 billion in 2011.
Above the law?
Tesco reacted aggressively to their fine and promised to fight it in court.
They can absorb huge legal costs - and often do. They've used their legal muscle to push planning applications through in the past. They'll use their power to fight this ruling.
Superpower
Friends of the Earth is concerned that supermarkets are too powerful. This power comes at the expense of farmers, local shops, and consumer choice.
It's clear we need to fix our unfair food system.
The OFT can step in when the supermarkets act illegally, but we need a strong supermarket watchdog to make sure that supermarkets behave fairly all of the time.
Take action to ask the Government for a stronger supermarket watchdog, and to support a sustainable livestock sector in the UK.
© Amanda Rudkin
