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TEXT ONE
Tesco is preparing a legal battle to clear its name of involvement in the dairy price
-fixing scandal that has cost consumers ￡270 million. Failure to prove that it had no
part in collusion with other supermarkets and dairy processors may land it with a fine of
at least ￡80 million. The Office of Fair Trading （OFT） said yesterday that Asda，
Sainsbury‘s and the former Safeway， plus the dairy companies Wiseman， Dairy Crest and
Cheese Company， had admitted being in a cartel to fix prices for milk， butter and
cheese. They were fined a total of just over ￡116 million as part of a leniency deal
offered by the watchdog to companies that owned up quickly to anti-competitive behaviour.
Officials at the OFT admitted privately that they did not think they would ever
discover which company or individual had initiated the pricing formula. But the watchdog
recognises that at the time supermarkets were under pressure from politicians and farmers
to raise the cost of milk to save dairy farming， though it is not certain that money
found its way to farmers. The OFT claimed in September that it had found evidence that the
retail chains had passed future milk prices to dairy companies， which then reached a
fixed price among themselves.
The average cost to each household is thought to be ￡11.25 over 2002 and 2003. Prices
went up an extra 3p on a pint of milk， 15p on a quarter of a pound of butter and 15p on a
half pound of cheese. There is no direct recompense for consumers， however， and the
money will go to the Treasury. The National Consumer Council gave warning that the
admissions would dent consumer confidence in leading high street names and that people
would become sceptical of their claims. Farmers For Action， the group of farmers that has
led protests over low milk prices since 2000， is seeking legal advice on whether it can
now bring a claim for compensation.
The OFT investigation is continuing， however， in relation to Tesco， Morrisons and
the dairy group Lactalis McLelland， and any legal action is expected to be delayed until
that is completed.
Tesco was defiant and said that it was preparing a robust defence of its actions. Lucy
Neville-Rolfe， its executive director， said： “As we have always said， we acted
independently and we did not collude with anyone. Our position is different from our
competitors and we are defending our own case vigorously. Our philosophy is to give a good
deal to customers.”
Morrisons has supported the OFT in inquiries into the former Safeway business that it
took over， but in a statement said that it was still making “strong representations” in
its defence. A spokeswoman for Lactalis McLelland said that the company was “co-operating
” with the OFT. Industry insiders suggested that the three companies were deliberately
stalling the OFT investigation.
Sainsbury‘s admitted yesterday that it had agreed to pay ￡26 million in fines， but
denied that it had sought to profiteer. Justin King， the chief executive， said he was
disappointed that the company had been penalised for actions meant to help farmers but
recognised the benefit of a speedy settlement. Asda declined to say how much it would pay
in fines and also said that its intention had been to help farmers under severe financial
pressure.
1. From the first paragraph， we may infer that _____
[A] Tesco is the most resolute among all the retailers to defend its reputation.
[B] it is already proved that Tesco has colluded with Asda， Wiseman， Dairy Crest and
Cheese Company in fixing the dairy price.
[C] Tesco is offered a leniency deal of ￡80 million because of its quick response to
the anti-competitive behaviors
[D] Tesco is trying its best to prove its innocence of the scandal.
2. Who is most probably the initiator of the pricing formula？
[A] Retail chains.
[B] Farmers.
[C] Dairy companies.
[D] Politicians
3. The word “defiant” （Line 1， Paragraph 5） most probably means _____.
[A] resisiting
[B] angry
[C] deficient
[D] confident
4. We may infer from Morrisons‘ statement that _____
[A] Morrisons turn out to be the most defentive when dealing with OFT.
[B] Morrisons is reluctant to support the inquiries into the former Safeway business.
[C] industry insiders suggest that Morrisons was trying to delay the OFT investigation
with non-cooperation.
[D] Morrisons indeed refuses to admit its involvement in the scandal.
5. The writer‘s attitude to Tesco can be said to be _____
[A] biased.
[B] objective.
[C] sympathetic.
[D] optimistic.
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