Dairy firm 'operates monopoly'

Wiseman controls up to 85% of the milk market

The Competition Commission has concluded that Scottish milk giant Robert Wiseman has been operating a monopoly north of the border.

During an initial three-month inquiry it found that the company currently controls up to 85% of the Scotland's milk market.

Having established the existence of a monopoly, the commission says it must now determine whether it had carried out any "uncompetitive" practices or had "exploited" its position.

'Competitive' market

It further investigations will also centre on Wiseman's distribution of milk to supermarkets, other retailers and caterers.

And it will seek to establish whether the firm's aggressive reputation acted as a barrier to other players entering the market.

Wiseman has expanded rapidly over the last three years through both organic growth and acquisitions.

In 1997 it bought Scottish Pride which gave it 75% of the market at the time.

Wiseman, which is based in East Kilbride, near Glasgow, has recently made moves into the English market.

Takeover battle

It opened a dairy in Manchester in 1995 and is planning to open a £30 million dairy at Droitwich, near Birmingham.

However, it has been hit by a downturn in profits and last month blamed the "extremely competitive" market in Scotland for the deterioration.

The commission's statement on Tuesday comes at an important time for the acquisitive dairies group as it continues its battle with rival Dairy Crest to takeover the milk and cheese businesses of Unigate.

Last week Dairy Crest trumped Wiseman's £225 million cash bid for Unigate with a £235 million offer.

The decision to investigate the Scottish milk market was taken by the commission after being referred by the Director General of Fair Trading in February.