Morrisons to sue OFT over milk price-fixing claims

LONDON - Morrisons is to sue the Office of Fair Trading after the competition watchdog named the company in its ongoing investigation into an alleged milk price-fixing cartel among the UK's big four supermarkets.

The multimillion-pound writ was issued after Morrisons claimed it was wrongly identified by the OFT in September for being involved in milk price fixing, along with Tesco and dairy firm Lactalis McLelland, dating back to 2002.

The OFT's statement said Morrisons had colluded to increase the retail price of milk in 2002, but that the provisional findings of its investigation, which began in September last year, did not allege Morrisons had been warned about anti-competitive practices.

Following the OFT's original statement, Morrisons claims its naming in the investigation damaged its reputation, which was a "direct, intended and foreseeable consequence of the publication of the statement".

Morrisons, which submitted its writ on January 10 but has only made it public now, said it had evidence of "50 incidences" of negative broadcast and press coverage, which it said were evidence of its reputation being damaged.

Morrisons' decision to sue the OFT differs from the stance Asda and Sainsbury's took when they were also named in the watchdog's investigation into the price fixing of milk. Each of the supermarkets chose to settle with the OFT in December in return for lesser fines.

In a statement to the Financial Times, the OFT said it was unable to discuss the ongoing litigation with Morrisons, but said: "We can confirm there is a continuing investigation into alleged collusion by Morrisons concerning milk prices in 2002."

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