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MSE News: Supermarkets fined millions for price fixing

edited 30 November -1 at 1:00AM in Gone Off!
22 replies 3.8K views
2.4K posts
edited 30 November -1 at 1:00AM in Gone Off!
This is the discussion thread for the following MSE News Story:

"Asda, Sainsbury's and Tesco are among nine firms fined after the OFT said they co-ordinated price increases ..."


  • JAGJAG Forumite
    1.3K posts
    Part of the Furniture
    They ripped off the consumer by around £270 million but they are fined £50 million.

    So £220 million profit from this scam!

    Good deterent there ;)

    They need to look at the energy suppliers who are doing the same.
  • gjchestergjchester Forumite
    5.7K posts
    "The scandal is thought to have cost consumers around £270 million. The OFT initially intended to fine the guilty parties more that £116 million, but scaled back the penalties after a consultation period. "

    The big supermarkets get fined £10 millioneach, the smaller ones less so. Even if all nine got fined £10m thats still a net gain of £180 million.

    So averaging over all nine each supermarket made £20m by the price fixing after paying the fine (won't be in reality, the big boys will have a larger cut) so whats the incentive NOT to do it again?

    OFT toothless as usual.
  • So, when do we, as consumers, get our refund?

    Or will the authorities just be pocketing the money from this fine for themselves?
  • I think the money will be pocketed by the state. However, it should instead be distributed to the dairy farmers who had to have their livestock killed during the foot and mouth outbreak that occurred in 2002.

    I remember going to Ireland that Easter and there were lots of checks and controls in place at Dublin Airport, however on my return through Gatwick area there were no controls in place to prevent more - the labour government at the time did little or nothing to prevent the spread of the disease or help out the farmers affected.

    I would be happy if it was distributed to all dairy farmers, it is a hard way to make a living and thanks to the power of the big supermarkets they get paid a pittance for their produce.
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  • jamesdjamesd Forumite
    24K posts
    Part of the Furniture 10,000 Posts
    niamhirl wrote: »
    I think the money will be pocketed by the state. However, it should instead be distributed to the dairy farmers
    That's part of the excuse Sainsbury's is using for its own illegal acts:

    'Sainsbury’s meanwhile said: “This is an old case dating back to 2002 which we agreed to settle with the OFT in 2007, despite our disappointment at being penalised for actions that were intended to help British farmers.'

    Among those involved were these farmer's organisations:

    Arla: Swedis-Danish farmer's cooperative, biggest producer of dairy products in Scandinavia. Participated in the price fixing, then told the OFT about it.

    The Cheese Company, appears to be part of milklink, a major cooperative. Not certain of this ownership. However, this acquisition happened after the offenses, so milklink itself seems blameless.


    Dairy Crest, formerly the processing arm of the Milk Marketing Board, now a private company.

    Lactalis McLelland, a major Cheddar cheese producer, known in part for the Seriously Strong Cheddar brand.

    Wiseman, claims to produce 30% of all milk consumed in Britain. Wiseman Milk Parnetrship group of farmers involved in supplying this business.

    While farmers should have fair prices, that should not come at the expense of consumers having to pay more through illegal collusion and price fixing that most hurts those in society who are least able to pay.
  • edited 11 August 2011 at 1:57AM
    228 posts
    edited 11 August 2011 at 1:57AM
    I'm in favour of Tesco for this one. Often quangos like to manipulate things and I'd be very keen to see the evidence they've apparently got (but not shared, made public or even referenced) to slap a legitimate and successful business with this fine.

    Also what of the other supermarket chains not involved in this apparent cartel? Why are their prices not far cheaper if they weren't fixing them high also?

    TBH doesn't make sense. Another quango desperately clutching at straws to try and justify its pathetic big-government existence before it's hopefully scrapped.
  • tifositifosi Forumite
    484 posts

    So you consider the OFT to be a quango?

    I'm afraid not

    The OFT is a non ministerial goverment department, whereas a quango has no official links to goverment over than by finance

    I'm sure with the money they have Tesco etc could afford the legal representation to win this case if it is indeed a "stitch up"?

    I just want to know what kind of "consultation" led to the fine dropping from £116M to £50M?

    This is bad as the banks being fined pathetic amounts that are dwarfed by the cost to consumers

    Congratulations to all who have got their PPI back!

  • This is Bull. The Supermarkets rip us, the customer off so what happens.

    They get fined by the government.

    Nothing to do with making amends to the customers. The government takes the cash.

    So what will happen now. They will increase their prices to recoup the money so the ripped off consumer is ripped off again.
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  • tifosi wrote: »
    So you consider the OFT to be a quango?
    I'm afraid not
    The OFT is a non ministerial goverment department, whereas a quango has no official links to goverment over than by finance
    Please if you think that quangos do not reports to the overlords in the ruling administration I fear all hope is lost, along with my will to live. I didn't think the public were too naive on this subject now.

    A QUasi Autonomous Non-Governmental Organisation has a hint in it's name as to what it really is

    tifosi wrote: »
    I'm sure with the money they have Tesco etc could afford the legal representation to win this case if it is indeed a "stitch up"?
    It would not be the first time I have sat in a gallery and watched the government lie. Let us not too quickly forget the case of Tony Allen, the disgraced former head of Oldham Trading Standards who was sacked after it was proved he lied, manufactured evidence and fabricated charges even under oath in a Crown Court.

    The entire Trading Standards department were caught red handed doing this...

    Trading Standards manufactured thousands of false claims against a kitchen maker and used these fake complaints to try and get the company closed down. They even raided their premises twice and took away everything, based on these lies they invented, and it also resulted in the biggest police raid yet by TS - around 130 officers :eek:

    Trading Standards lies cost the taxpayer around £5,000,000.00. When the judge dismissed the case he nearly sent the head of Trading Standards to prison - bet you didn't hear much about that in the news!

    So do I have faith that the OFT is not on the scam? Not on your nelly!

    I hope Tesco drag them through the courts and rip the core out of them and the OFT ends up being dismantled. Tesco may be a large company but they have every right to justice and not to be the victim of government lies.
  • AzariAzari Forumite
    4.3K posts
    Part of the Furniture 1,000 Posts Name Dropper
    I always wondered why it was that all the big supermarkets happen to sell milk for the same price. I assumed it was the cheapest that they could sell it.

    That was until I started occasionally using some 'Arab' (i.e. lots of useful ingredients for middle Eastern cooking and staffed by people who speak Arabic) supermarkets in West London and discovered that it was only around 60% of the price.

    There is obviously some informal agreement between the big supermarkets to price milk at a certain level and this is still going on to this day, so calling this an 'old' problem is disingenuous.
    There are two types of people in the world: Those that can extrapolate information.
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