Competition Authority Warns IFA on Milk Prices.

The Competition Authority confirmed that it has written to the IFA following recent media reports concerning milk prices in the new Aldi group stores which opened in Dublin and Cork last week. In a statement the Authority indicated that it had sought a meeting with the IFA to clarify the legal position under the Competition Acts, following newspaper reports that the IFA had approached the supermarket group over the price at which it was selling milk. The Authority was hopeful that such a meeting could resolve the issue.

The position as far as the Authority is concerned is relatively straightforward. Aldi are free to sell milk at whatever price they like, provided they adhere to the provisions of the Groceries Order. They are equally free to buy milk from whoever they choose and presumably they buy from whoever gives them the best deal which they in turn pass on to their customers. In the Authority's view an attempt by any association to interfere with a retailer's right to set its own prices and to seek to raise that price would be a breach of Section 4(1) of the Competition Act, 1991. The price of milk in most shops in the Republic of Ireland is considerably higher than in Northern Ireland although the Authority understands that the prices paid to farmers are broadly similar.

Within the past few months the Authority has instituted court proceedings against Glanbia, Dairygold, NCF Sligo Dairies, Tesco and Superquinn following an investigation into the milk trade in the latter half of last year. This case has yet to come before the courts and the Authority cannot comment on the specific aspects of this case.

Lower prices obviously benefit consumers and, in the case of a product such as milk, less well off consumers and households with large families would benefit considerably from having lower priced milk available.