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February 14, 2012
Arla probe reveals milk monopoly plans
Published: 24 Jun 09 16:24 CET | Double click on a word to get a translation
Online: http://www.thelocal.se/20256/20090624/
Scandinavian dairy producer Arla Foods was engaged in a plan to “completely shut competing companies out of the market”, Swedish competition authorities allege.
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In April, the competition agency carried out a raid of Arla Food offices in Sweden and Denmark as part of a probe into suspected crimes against competition rules in relation to Arla’s relationship with the Coop and Axfood grocery chains.
Documents recovered in the raid indicate that Arla has a comprehensive plan to crush competing food companies by including clauses in its contracts forcing retailers to exclude the competition.
In a brief submitted to the Stockholm District Court reviewed by The Local, the Competition Authority writes that letters of intent were signed “with Netto, Bergendahlsgruppen and/or Lidl, and that Arla was negotiating on and eventually entered into a contract with Ica”, referring to several major food retailers in Sweden.
The documents were found on computers in Arla offices searched as a part of the April raid.
Arla, however, remains doubtful of the agency’s allegations.
“I don’t understand where this is coming from. Our only ambition is to serve our customers in the best way possible,” said Tobias Wåhlén, head of external communications at Arla Foods, to the Aftonbladet newspaper.
“We can’t see how there are any grounds for these suspicions.”
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This sounds really unclear. What did those clauses contain? What methods were they employing to "force exclusion" were they contractual obligations or price considerations? Were they abusive or creative?
All in all, monopoly is an interesting topic and it is even more ironically so in Sweden where true state monopoly is desirable and nurtured and a healthy, normal, within the limits of the law desire to crush competitors through sheer quality and innovation is seen as questionable.