The United Kingdom's largest supermarkets have artificially raised dairy product prices, ignoring a previous warning and increasing consumer costs by around 270 million pounds, the UK's consumer watchdog said yesterday.

The Office of Fair Trading (OFT) said supermarkets and dairy processors had colluded to put up the price of milk, butter and cheese between 2002 and 2003 by sharing commercially sensitive information, despite its previous warning that their actions might be anti-competitive.

"This is a very serious case... Consumers have lost out to the tune of hundreds of millions of pounds," the OFT executive director Sean Williams said in a statement.

The watchdog issued its findings to Asda, Morrisons, Safeway, Sainsbury and Tesco, as well as dairy processors Arla, Dairy Crest, Lactalis McLelland, The Cheese Company and Robert Wiseman.

The OFT cannot decide if the law has been breached until it has received and reviewed the parties' responses.

Tesco, Asda and Sainsbury all said they would "vigorously defend" any allegations.

Ken Morrison, chairman of WM Morrison Supermarkets, which was formed from a merger of Morrison's and Safeway in 2003, said the position of Morrison's and Safeway would have to be considered separately as the OFT's investigation concerned a period prior to the merger.

"But I can say Morrison's has never been involved in the issues the industry stands accused of," he told reporters in a conference call on company earnings.

(China Daily September 21, 2007)