Glanbia has admitted that it facilitated the pricefixing of cheese in a number of large UK supermarkets in 2002. Una McCaffreyreports.
The company and a former British subsidiary face a shared fine of up to £2 million (€2.77 million) from the UK's Office of Fair Trading (OFT) in respect of the anti-competitive breach, which relates to Glanbia's then ownership of the Cheese Company.
In total, 10 companies, including Tesco, Asda and Sainsbury's, were cited by the OFT as being involved in alleged collusion. All but three of the firms identified have accepted a "liability in principle". Those that have acknowledged culpability will collectively pay more than £116 million in fines, while the OFT will continue to pursue the remaining firms.
The OFT alleged that the Cheese Company had "facilitated the exchange of commercially sensitive information between certain retailers in respect of the retail price of UK-produced" cheese.
Glanbia accepted "liability in principle" on the allegation and, as a result, faces a reduction in the financial penalty that might otherwise have been imposed. This will, however, be conditional on the firm's continued co-operation with the competition regulator's investigation.
"Further to the OFT announcement, Glanbia confirms that it is party to an agreement with TCC [ the Cheese Company] whereby both parties have agreed to co-operate with the OFT in its ongoing investigation," the company said yesterday.
Glanbia pointed out that while the maximum fine that could be imposed on the two companies combined would be £2,016,360, it expected the actual fine imposed would be "substantially lower".
In September, Glanbia said the Cheese Company believed it had "acted in good faith at all times in relation to the supply of cheese in the UK market".
The OFT acknowledged yesterday that cheese suppliers and supermarkets were under pressure during the period in question to support dairy farmers.
Glanbia sold 75 per cent of the Cheese Company to UK firm Milk Link in 2004 and disposed of the remaining 25 per cent in 2006. In total, Glanbia received £127 million for the company.
Shares in Glanbia closed five cent higher at €4.45 yesterday.
