Companies: RWD   

The Office of Fair Trading (OFT) is poised to take action against Scottish milk producer Robert Wiseman Dairies regarding an alleged abuse of its dominant 'middle market' position. Elliott Davis reports.

The proposed 'interim measures direction' follows a complaint from one of Robert Wiseman's (RWD) English rivals, Express Dairies (EXD), and could involve OFT imposing constraints on how much Wiseman can charge for its milk in the Scottish Highlands. There are feelings in some quarters that Wiseman has been undercutting its rivals in the Highlands by selling milk at much lower prices than it charges elsewhere north of the border. OFT spokesman Mark Kram commented that 'we felt we had reasonable ground to suspect that the law has been breached'.

Wiseman's finance director Billy Keane professed to being 'obviously disappointed' with the news, not least because the Competition Commission had investigated the issue last year. Although he was quick to point out that no action was taken against Wiseman back then (because the commission was 'totally deadlocked'), Keane admits that he and his fellow directors had 'thought that the whole thing was over'.

With OFT's director general having recommended the pricing restrictions in order to prevent 'serious, irreparable damage' being done to Express and its Scottish subsidiary Claymore Dairies, Wiseman now has the chance to put its case across before any action is taken.

As the animosity within the milk sector continued to rise, Keane said that 'it is now very important to us that we get the right result'. Citing Wiseman's strong position in England he added, 'we always felt they [Express] came to Scotland to get even'.

The shares remained unmoved at 123.5p on the news.