The OFT has updated its guidance to UK farmers on competition law. As noted in August 2011, competition law has developed since 2004, when the guidance was first published, and we believe it is timely to reflect these developments in the updated guidance. We also wanted to ensure that the guidance is clear and tackles questions that are relevant to farmers today.
We have consulted with farmers' unions and representatives, Defra and other interested parties in the farming sector. The aim was to find out the sorts of issues on which farmers and their representatives would most benefit from guidance. We are grateful to those who gave us their views during the consultation.
In addition to noting developments in the law, the new document adds more detail on:
The FAQs form part of the OFT's ongoing commitment to provide guidance to businesses and consumers about competition and consumer legislation. It should be noted, though, that they are not intended to provide a substitute for independent legal advice on potential co-operation arrangements. For example, we have not been able to provide guidance on or assessments of detailed hypothetical arrangements or situations.
The OFT is aware of concerns about dairy prices and understands that a dairy industry voluntary code of practice, aimed at ensuring contractual best practice between UK producers and processors of dairy products ('the Code'), has now been agreed.
While the OFT does not generally provide views in response to requests asking whether specific arrangements between businesses comply with competition law, it provided informal views on an earlier draft of the Code to DEFRA and the authors of the Code given the exceptional circumstances in the UK dairy industry. The OFT provided its informal views to assist the dairy industry assess its own arrangements under competition law.
The OFT considers that it should be possible for producers and processors to adhere to the Code without raising competition law concerns. However, the OFT identified a small number of points in relation to competition law that the parties might wish to consider further. Generally, they should ensure that they do not fix prices (outside of the regulatory framework that the EU Dairy Package allows for through Producer Organisations), share markets or exchange commercially sensitive information with competitors.
Separately, the OFT was asked to consider a distinct voluntary code of practice on contractual relations between producers and milk purchasers that we understand certain Northern Ireland dairy industry representatives have agreed ('the NI Code', and together with the Code 'the Codes'). For the same exceptional reasons set out above in relation to the Code, the OFT provided views on the NI Code to the Northern Ireland Government and the authors of the NI Code. The OFT's informal views on the NI Code - which is written in substantially the same terms as the Code - were essentially the same as set out in the previous paragraph in relation to the Code.
The OFT's informal views on the Codes should not be seen as an approval or endorsement. It is the responsibility of individual businesses to satisfy themselves that their arrangements and conduct arising from either of the Codes do not infringe competition law.
Any business which has competition concerns arising from the operation of either of the Codes should consider seeking legal advice. Additionally, if someone has concerns that others may be infringing competition law, they should bring this to the OFT's attention.
We would be interested in receiving your feedback on the revised FAQs and, in particular, whether you find them helpful. Any comments should be sent to:
Farming collaboration FAQs
Office of Fair Trading
2-6 Salisbury Square
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