OFT
The Office for Fair Trading uses market structure, conduct and performance indicators to scan the UK economy for evidence of monopoly abuse. This is used to analyse and evaluate costs/benefits of monopoly. The OFT, along with the Competition Commission, creates incentives for firms to resist temptation to exploit possible monopoly power. Firms will not want to risk getting caught by these regulatory bodies therefore uses these incentives.
Showing posts with label OFT. Show all posts
Showing posts with label OFT. Show all posts
Sunday, 28 August 2011
Wednesday, 10 August 2011
Case Study for the Office of Fair Trading
The OFT has fined 9 companies a total of £50m for price fixing of dairy products in 2002 to 2003. Arla, Asda, Dairy Crest, McLelland, Safeway (now Morrisons), Sainsbury's, Tesco, The Cheese Company and Wiseman are the dairy producers/supermarkets involved who fixed the price of milk, cheese, butter and other dairy products.
This is a good case study to mention in the exam to discuss why firms would want to engage in collusive agreements (see cartel although this isn't necessarily a cartel, it displays characteristics) and the effectiveness of regulatory bodies in protecting consumers against anti-competitive practices.
This is a good case study to mention in the exam to discuss why firms would want to engage in collusive agreements (see cartel although this isn't necessarily a cartel, it displays characteristics) and the effectiveness of regulatory bodies in protecting consumers against anti-competitive practices.
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