Arla Foods UK, British supermarkets' biggest milk supplier, has issued a summons in the Court of Session claiming that its UK business has suffered losses stemming from anti-competitive practices alleged by the OFT in its statement of objections issued last month.
As we reported last month in 'Scottish milk cartel uncovered?' the OFT recently issued a provisional finding that Robert Wiseman, Ballantyne, Graham's, Quothquan, Renfrew and Scottish Milk Dairies had been engaged in collusions in Scotland's middle-ground market sector for milk between 2000 – 2003.
Based on the provisional findings made by the OFT, Arla Foods UK has issued a summons against nine defenders in the Court of Session alleging it has suffered £15m of damages as a result of the alleged price-fixing at the time.
The move has been reported in the Scottish press as the latest twist in a long-running feud in the milk market. A spokesperson for Wiseman's said that Wiseman would defend itself vigorously against the claims made by the OFT, and a similarly defensive rhetoric was stated yesterday in light of this new action.
Arla's spokesperson described the issuing of the summons as a 'protective measure' to avoid meeting the five-year deadline for raising actions. No further comment was made by the spokesperson.
Arla Foods Amba was formed by a tie-up of Arla (Sweden) and MD Foods (Denmark). It has recently entered into negotiations with its British subsidiary, Arla Foods UK plc, to purchase the remaining 49% in the shares of the subsidiary. Arla Foods Amba already owns 51% of the shares. The British company has a 35 per cent share of the British fresh milk market. In 2003 the Arla subsidiary merged with Express Dairies; Claymore Dairies is the Scottish subsidiary of that company.
With farmers' being concerned about the level of control in the market, Wiseman's announcement that it is increasing its 'farm-gate price', i.e. the price it pays to farmers for their milk, was welcomed by the National Farmers' Union's vice-president, Jim McLaren.