Price maintenance/refusal to supply—Liquid dairy products

The Competition Bureau (“Bureau”) had received a complaint in December 2005 alleging that a processor/distributor of packaged fluid milk products refused to supply a retailer based on their low pricing policy. In this instance, the retailer was claiming that the processor/distributor attempted to discourage the reduction of the price they were charging by stopping to supply them with packaged fluid milk products, which may raise an issue under the price maintenance section of the Competition Act (“Act”).

A Bureau examination was conducted under the criminal provision of Section 61 of the Act. Bureau staff met with representatives of the company in question to address the Bureau’s concerns and the Price Maintenance provision of the Act. A company representative indicated that the decision not to sell to the retailer was because other smaller retailers were purchasing milk from this retailer and transporting it in unrefrigerated vehicles and that they felt that this would impact the quality of the milk and negatively affect their brand image. However, without admitting participation in any such price maintenance practice, the company provided that it would ensure future compliance with the Act by indicating:

  1. the company will, forthwith, take all necessary steps to ensure non-participation of the company, its officers or employees in any price maintenance practice;
  2. the company and its representatives will not interfere in pricing strategy of its retailers who are free to adopt the pricing strategy of their choice; and
  3. the company will take all reasonable steps to ensure that in all respects its business conduct complies with the requirements of the Act.

The matter was resolved in July 2007.

3101593

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