THE Forum of Private Business (FPB) believes that two of the UK’s biggest supermarkets, which admitted fixing the price of dairy products, have not received adequate fines.
Sainsbury’s, Asda and a number of dairies held up their hands and will have to pay more than £116m in total.
But the FPB says that, compared to the two supermarket giants’ collective profits, that figure is a drop in the ocean.
In addition to Sainsbury’s and Asda, Safeway – prior to its acquisition by Morrisons – as well as the Dairy Crest, Wiseman and The Cheese Company dairies all admitted conspiring to fix the price of milk, cheese and butter following an inquiry by the Office of Fair Trading (OFT).
Matthew Goodman, of the FPB, said: “The fines are dwarfed by the huge profits made by these retailers.
“An opportunity has been missed to make them stop and think about the way they do business.
“If nothing else, though, it proves that they do not really have their customers’ interests at heart.”
Sainsbury’s posted an operating profit of £232m in the 28 weeks to October 6, an increase of £38m on 2006.
US retailer Wal-Mart, which owns Asda, saw pre-tax profits rise to a staggering £1.4bn in the three months to October.
The supermarkets fell foul of the Competition Act 1998, which prevents businesses from colluding in a way that harms competition.
The OFT reported that customers were being charged 15p extra for a quarter-pound of butter, the same per half-pound of cheese and 3p extra per pint of milk.
All of the supermarkets and dairies which admitted liability have argued that their actions were designed to aid British farmers, who were reeling from the effects of the foot and mouth outbreak. However, the FPB agrees with the OFT’s findings that smaller producers did not benefit from the higher prices paid by consumers.