Arla Foods targeted in competition probe

Arla Foods targeted in competition probe
Swedish competition authorities raided offices of Arla Foods on Tuesday to investigate whether the Scandinavian dairy producer had entered into an illegal agreement with the Coop grocery chain.

Representatives from the Swedish Competition Authority (Konkurrensverket) descended on Arla’s offices in Stockholm, while the agency’s Danish equivalent made an unannounced visit at Arla’s headquarters in Viby, Denmark.

At issue is a supply agreement signed between Coop and Arla earlier in the year which authorities believe may unfairly disadvantage smaller dairy producers.

Authorities are investigating whether Arla has used its dominant position in the dairy market to undercut other smaller dairy firms.

According to the Dagens Nyheter (DN) newspaper, the agency’s warrant claimed that an exclusivity clause in the agreement resulted in an unfair limiting of choice for consumers of milk and other dairy products.

“We view this with the utmost seriousness,” said Arla Foods head Peder Tuborgh in a statement.

He added that he would be very surprised if Arla Foods had entered into an illegal agreement.

The Competition Authority emphasized that it’s important for consumers that the market for dairy deliveries to grocery store chains function well from a competitive point of view.

According to the agency, it’s still too early to say what the investigation may reveal.

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