The £116m fines imposed on some of our biggest supermarkets and dairy companies for fixing the price of milk, cheese and butter leave a bit of a sour taste.
Sainsbury’s, Asda and Safeway (before it was taken over by Morrisons) admitted liability in principal and so earned themselves lower fines from the Office of Fair Trading.
The OFT has also stated the guilty companies will each “receive a significant reduction in the financial penalty that would otherwise have been imposed on it, on condition that (they continue to) provide full co-operation”.
This leniency grates almost much as the comment from Justin King, chief executive of Sainsbury’s, who still expressed disappointment with the £26m fines imposed on his company “for actions that were intended to help British farmers”.
If Sainsbury’s was really interested in helping British farmers they will also be providing full compensation to all those unable to get a fair price for their products, including those dairy farmers forced to give up generations of work because of the price squeeze.
This is obviously on top of the fact that they have been misleading their own valued and loyal customers.
The OFT’s investigation is continuing, with Morrisons itself, Tesco and dairy firm Lactalis McLelland, still in the frame.
However, many critics maintain that the dairy produce price fixing is merely the tip of the iceberg with the intense competition between the major retailers adding further pressure to lower prices and hitting agriculture and associated industries hardest.
This investigation also suggests that the consumers don’t actually win as a result of such initiative. So who is benefiting?
That is an easy one. Compared to the ever-increasing profits many of these companies are enjoying, fines totalling £116m represent little more than small change.