Dairy Company Kú Sues MS for Competition Breach Skip to content

Dairy Company Kú Sues MS for Competition Breach

Dairy company Kú has filed charges against Mjólkursamsalan (MS), the dominant company on the dairy market, to the Icelandic Competition Authority for violating the competition law. The lawsuit argues that MS is not exempt from competition laws because it isn’t a production facility (afurðarstöð) as claimed.

The law on agriculture (búvörulög) states that production facilities in the dairy industry can merge, make agreements, divide projects and cooperate by other means, ruv.is reports.

However, Kú claims that MS is not a production facility, only Auðhumla, its parent company. The milk collected from farmers is weighed in the name of Auðhumla before it is sold to MS.

“From the day it was founded Mjólkursamsalan has never accepted milk from the hand of producers, not a single drop, and has therefore never been defined as a production facility or fulfilled the legal conditions for production facilities,” CEO of Kú Ólafur Magnússon reasoned.

Ólafur maintains that MS did not have the legal authority to cooperate closely with production facilities in the dairy industry and thus violated competition law.

MS’ lawyers reject the Ólafur’s interpretation of the law, stating that the company is legally defined as a production facility and the fact that the milk is weighed by Auðhumla is irrelevant.

The ICA recently fined MS for violating the competition law in a different case. MS appealed the verdict.

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