The Icelandic Competition Authority (ICA) concluded on September 22, that MS, the largest dairy company in Iceland, had hindered competition on the dairy market by selling milk to competitors at a 17 percent higher price than to companies connected to MS.
ICA recommends issuing a fine of ISK 370 million (USD 3.1, EUR 2.4 million) on MS for abusing its dominant position on the dairy market, weakening independent dairy company KÚ and contributing to MS-related Kaupfélag Skagfirðinga (KS) taking over another competitor, Mjólka, in 2009, as it says on the authority’s website.
MS has appealed ICA’s decision and in a statement denies having been in violation of the competition act, stating that the pricing of milk is in compliance with the official pricing registry of agricultural products and in compliance with agricultural and competition laws.
Minister of Industry and Commerce Ragnheiður Elín Árnadóttir told ruv.is last week that if ICA’s conclusion is confirmed, it is a very serious matter that might lead to an overall review of the laws on agricultural products.
ICA is critical of the dairy industry being exempt from certain provisions of the competition act, forcing competitors to buy milk from MS, resulting in MS having a near monopoly on the market. The exemption is equally disputed in parliament.