OFT Dairy Investigation

Sainsbury(J) PLC
07 December 2007





7 December 2007





                       OFT DAIRY INVESTIGATION CONCLUDED





J Sainsbury plc (Sainsbury's) today confirms that is has agreed to pay a
settlement of £26m to the Office of Fair Trading (OFT) relating to its
investigation into dairy retail price initiatives for milk and cheese in 2002
and 2003.  This concludes the OFT's investigation of Sainsbury's.



Sainsbury's has co-operated fully and responded swiftly to the OFT's
investigation. The level of the settlement reflects this co-operation and the
exceptional circumstances prevailing at the time, which led to a prolonged
period of farmer protest and disruption in the industry.



Sainsbury's chief executive, Justin King said:  'We are disappointed that we
have been penalised for actions that were intended to help British farmers, but
recognise the benefit of a speedy settlement with the OFT.



'The price initiatives in 2002 and 2003, which were widely and publicly reported
at the time, were designed to help British dairy farmers at a time of
considerable economic pressure and public debate about whether farmers were
getting a fair price for their products.



'We work incredibly hard to make sure that the 16.5 million customers who visit
our stores each week are able to buy quality products at fair prices.  Ensuring
we remain competitive on price is a key strand of our strategy as is ensuring
our suppliers receive a fair deal.  We are fully committed to supporting British
farming and to sourcing wherever possible in the UK'.



Last year, Sainsbury's launched the Sainsbury's Dairy Development Group (SDDG),
which aims to deliver greater profits to dairy farmers by working with them to
innovate and improve their on farm efficiencies.  This is supported by a multi
million pound fund.



All 320 members of the SDDG are now receiving a premium of 1.5ppl over the
processor standard prices, earning farmers supplying liquid milk for Sainsbury's
one of the highest returns in the liquid milk markets.  At today's liquid milk
prices, Sainsbury's is paying £20 million more per annum to the farmers.



                                      Ends

Enquiries:

Investor Relations                      Media
Elliot Jordan                           Pip Wood / Gillian Taylor
[phone]                    [phone] / 0207 695 2750



Notes to editors: -

1. The OFT's investigation was conducted under Chapter 1 of the UK Competition
Act 1998, which gives the OFT the power to impose penalties on companies for
anticompetitive behaviour. The infringements of UK competition law admitted to
by Sainsbury's as part of the settlement concern the exchange of information
with processors relating to future pricing intentions for milk and cheese in
2002 and 2003.



2. As part of Sainsbury's Dairy Development Group, farmer representatives have
worked with Sainsbury's to identify areas such as herd health and milk
recording, carbon footprint audits and IT support to ensure dairy farmers have
the tools they need to produce British milk for years to come.



3.The £26m figure noted in paragraph one represents an agreed sum, further
discounted for early resolution and ongoing co-operation.







                      This information is provided by RNS
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