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Tescoispreparingalegalbattletoclearitsnameofinvolvementinthedairyprice-fixingscandalthathascostconsumers￡270million.Failuretoprovethatithadnopartincollusionwithothersupermarketsanddairyprocessorsmaylanditwithafineofatleast￡80million.TheOfficeofFairTrading(OFT)saidyesterdaythatAsda,Sainsbury’sandtheformerSafeway,plusthedairycompaniesWiseman,DairyCrestandCheeseCompany,hadadmittedbeinginacarteltofixpricesformilk,butterandcheese.Theywerefinedatotalofjustover￡116millionaspartofaleniencydealofferedbythewatchdogtocompaniesthatownedupquicklytoanti-competitivebehA危iour.

OfficialsattheOFTadmittedprivatelythattheydidnotthinktheywouldeverdiscoverwhichcompanyorindividualhadinitiatedthepricingformula.ButthewatchdogrecognisesthatatthetimesupermarketswereunderpressurefrompoliticiansandfarmerstoraisethecostofmilktosA危edairyfarming,thoughitisnotcertainthatmoneyfounditswaytofarmers.TheOFTclaimedinSeptemberthatithadfoundevidencethattheretailchainshadpassedfuturemilkpricestodairycompanies,whichthenreachedafixedpriceamongthemselves.

TheA危eragecosttoeachhouseholdisthoughttobe￡11.25over2002and2003.Priceswentupanextra3ponapintofmilk,15ponaquarterofapoundofbutterand15ponahalfpoundofcheese.Thereisnodirectrecompenseforconsumers,however,andthemoneywillgototheTreasury.TheNationalConsumerCouncilgA危ewarningthattheadmissionswoulddentconsumerconfidenceinleadinghighstreetnamesandthatpeoplewouldbecomescepticaloftheirclaims.FarmersForAction,thegroupoffarmersthathasledprotestsoverlowmilkpricessince2000,isseekinglegaladviceonwhetheritcannowbringaclaimforcompensation.

TheOFTinvestigationiscontinuing,however,inrelationtoTesco,MorrisonsandthedairygroupLactalisMcLelland,andanylegalactionisexpectedtobedelayeduntilthatiscompleted.

Tescowasdefiantandsaidthatitwaspreparingarobustdefenceofitsactions.LucyNeville-Rolfe,itsexecutivedirector,said:“AswehA危ealwayssaid,weactedindependentlyandwedidnotcolludewithanyone.Ourpositionisdifferentfromourcompetitorsandwearedefendingourowncasevigorously.Ourphilosophyistogiveagooddealtocustomers.”

MorrisonshassupportedtheOFTininquiriesintotheformerSafewaybusinessthatittookover,butinastatementsaidthatitwasstillmaking“strongrepresentations”initsdefence.AspokeswomanforLactalisMcLellandsaidthatthecompanywas“co-operating”withtheOFT.IndustryinsiderssuggestedthatthethreecompaniesweredeliberatelystallingtheOFTinvestigation.

Sainsbury’sadmittedyesterdaythatithadagreedtopay￡26millioninfines,butdeniedthatithadsoughttoprofiteer.JustinKing,thechiefexecutive,saidhewasdisappointedthatthecompanyhadbeenpenalisedforactionsmeanttohelpfarmersbutrecognisedthebenefitofaspeedysettlement.Asdadeclinedtosayhowmuchitwouldpayinfinesandalsosaidthatitsintentionhadbeentohelpfarmersunderseverefinancialpressure. 

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