Tesco hits back after £9.6m price fixing fine

Tesco has hit back at a record fine imposed by the competition regulator today for its role in a ring of supermarkets and dairy companies that fixed price of milk and cheese for more than a year.

The Office of Fair Trading has fined UK’s biggest supermarkets and dairy companies have been fined £49.5m for fixing milk and cheese prices in 2002 and 2003.

Tesco reacted to its £9.6m share of the fine by saying it would challenge the decision and calling for the OFT to be stripped of its role in handling such investigations.

"We surely have now reached the stage where the absurdity of the OFT operating as investigator, prosecutor and judge cannot be allowed to continue," said Lucy Neville-Rolfe, Tesco's director of corporate and legal affairs.

Four supermarkets: Asda, Safeway, Sainsbury’s as well as Tesco, and five dairies: Arla, Dairy Crest, McLelland, the Cheese Company and Wiseman, were fined for infringing competition law in three areas - in their pricing of cheese in 2002 and 2003, and milk in 2003.

Tesco received the biggest single fine as it participated in all three infringements and also did not benefit from the leniency granted to rivals that admitted liability early.

Arla was the first company to alert the OFT to the price agreements, and the first to apply for leniency, which cuts the cost of the investigation, and so received no fine at all.