Hints about a milk cartel

The Competition Commission stated yesterday there are strong indications of distortions in the fresh-milk market, ahead of the publication of the commission’s report on the market in two weeks’ time and which may create the biggest storm yet in the food sector. The unexpected statement mainly concerns the three companies with the lion’s share of the market, namely Vivartia, MEVGAL and Olympos, while FAGE has departed from the fresh-milk sector. The commission’s statement suggests that in the investigation «about a possible horizontal synergy between milk industries regarding their pricing policy and their relations with milk producers, certain indications have emerged concerning other distortions that affect consumer prices.» Consequently, «to save time and avoid a separate investigation into these distortions, the commission decided to incorporate them into the ongoing investigation of the General Directorate for Competition,» the statement read. From November 16 to 23, the commission visited major supermarket chains (Carrefour, Veropoulos and Atlantic, among others) to establish the tactics of the dairy industries toward retailers, i.e. whether they impose conditions on retail prices. This is the first time the commission has clearly implied anything about practices against healthy competition, both on the wholesale and retail level. Dairy industry sources yesterday reacted with surprise to the statement and wondered why the commission should issue it before the completion of the procedure, arguing that the statement only serves to make an impression and «appears to be prejudging the outcome.» Some observers go as far as attributing yesterday’s relatively strong criticism of the government by Dimitris Daskalopoulos, the head of the Federation of Greek Industries as well as of Vivartia, as a warning ahead of the commission’s report. According to the latest data available on the fresh-milk market, the biggest market shares belong to Vivartia (39 percent), Olympos (16 percent) and MEVGAL (14 percent). In the whole milk market as a whole (including fresh, highly pasteurized and others), Friesland leads with 26 percent, followed by Vivartia (23 percent), FAGE (8 percent), Olympos (8 percent) and MEVGAL (7 percent).

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