Supermarket Price Fixing

[anarchist]

http://news.bbc.co.uk/1/hi/business/7004054.stm



Large supermarkets and dairy processors have colluded to keep the price of dairy goods artificially high, the Office of Fair Trade (OFT) has found.

The price-fixing deal - which covered 2002 and 2003 - led to consumers overpaying for milk, cheese and butter by an estimated £270m, the OFT said.

"This kind of collusion on price is a very serious breach of the law," said OFT executive director Sean Williams.

"Businesses should understand that where we find evidence of this kind of anti-competitive activity we will use the powers at our disposal to punish the companies involved and to deter other businesses from taking such actions."

It added it had written to Asda, Morrisons, Safeway, Sainsbury and Tesco, as well as dairy processors Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Wiseman setting out its findings.

No doubt the punishment will be a slap on the wrist and an insignificant fine!

[PvtPyle]

Agreed, especially for Tesco. It would have to be an ENORMOUS fine to have any significant effect on their bottom line takings.

[ChemicalKicks]

Absolutely bad in my opinion, its not like they're struggling for takings is it. Who ends upbeing affected the most, Joe not earning a lot.

As above the fine will have to be huge, but how far would the fine be allowed to go. What would be significant to Tescos and others, a few million, a few hundred million?

[PvtPyle]

SUPERMARKET giant Tesco today underlined its dominance after posting record profits of £2.55 billion - equivalent to more than £4,800 a minute.

The retailer's underlying pre-tax profits for the year to February 24 were more than 13% ahead of the previous year, matching analysts' expectations for the Cheshunt-based company.

Tesco also coped with recovering competition from Asda and Sainsbury's to increase like-for-like UK sales by 5.6%. It recorded sales of £35.6 billion across its 1,500 stores in the UK.

Source: Manchester Evening News (http://www.manchestereveningnews.co.uk/news/business/s/1004/1004682_tesco_profits_up_13_per_cent.html)

So, with tesco earning £4,300 profit PER MINUTE, I would say it is almost impossible to fine them anything significant enough without upsetting the economic balance elsewhere. :eek:

[anarchist]

http://news.bbc.co.uk/1/hi/business/7132108.stm



Sainsbury's and Asda have admitted fixing the price of milk and cheese following an inquiry by the Office of Fair Trading (OFT).

The supermarkets, along with a number of dairy firms, have agreed to pay fines totalling at least £116m.

Cases against Tesco and Morrisons will continue after no deal was struck.

The OFT said that its evidence found that while dairy product prices went up after the collusion, the price received by farmers did not increase.

[robmiller]

i'm not sure my waistline would like the prospect of cheese lovely cheese being cheaper

[Mr Wonderful]

The OFT said that its evidence found that while dairy product prices went up after the collusion, the price received by farmers did not increase.

:mad: So not only did they stiff the public they also shat on the farmers.

[robmiller]

wait what

they made £270m from the price fixing

and have been fined a maximum of £110m

thereby netting the supermarkets a £160m profit from the price fixing

[robmiller]

i fucking hope so

edit: i'm really not sure it is you know, the guardian article for example says:

"The price collusion is estimated to have cost consumers £270m in higher prices."

to me that implies that prices where £270m in total above what they should've been

[TwoScoops]

Forgive me for being thick here, and while I don't like paying more than I should for anything (I'm tighter than cramp).

What have they actually done?

Charged more for their products? They want to go to our local Co-Op, daylight fucking robbery.

[JimmyEatWorms]

No, they have agreed with suppliers and competitors to keep the price artificially high so as to maximise profit and at the same time stiff consumers and producers.

[Smithy]

That's just good busieness isn't it?

Greedy, but then aren't we all. Is there a law stating they aren't allowed to charge what they want for selected products?

[robmiller]

Cabals in more diverse markets tend to break up naturally, but in something like groceries—where a few major players share 99% of the market—it's a lot more dangerous. If the major supermarkets all fix prices, what can you do? It's not like in a diverse market where the fixed price is almost compelled to be undercut by someone offering the goods at market price; that can't happen, because the cabal has no competition. Hence the government having to intervene.