Commission accuses Danube Foods of abuse

The Competition Commission officials say Danube Foods has abused its dominant position when buying milk from producers.

Izvor: B92

Wednesday, 30.01.2008.

14:57

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The Competition Commission officials say Danube Foods has abused its dominant position when buying milk from producers. The group, owned by Salford Investment Fund, is believed to have a monopoly position in the Serbian dairy market. Commission accuses Danube Foods of abuse However, no hard evidence has to date been presented to back up this allegation. Now the commission's chairwoman, Dijana Markovic-Bajalovic, told reporters in Belgrade that the group did engage in activities which created a monopoly in the market, and accused it of bad practices when it comes to the process of buying raw milk. The commission gave Salford one month to undertake measures and correct all irregularities, she said. "We have determined that the primary milk producers, at the moment when they sell their milk, do not know the price for it." "At the same time, they have no access to the process of analysis, and cannot confirm the value of these analyses," Markovic-Bajalovic said, and added that the producers are "simply told" about the composition of the milk they sell. This information is crucial in forming the price. Danube Group today refuted the accusations, saying that its share of the market is at 30 percent, "while a monopoly forms with 40 percent," according to Beta news agency. But the company's executives said they will act on the commission's findings and implement its orders, even though "all other firms in the market have the same type of contracts with producers." However, it is Salford, via Danube Foods, that owns the largest Serbian dairies, including Imlek, Impaz, Suboticka, Zemunska and Novosadska. On top of that, the group owns Bambi-Banat, and co-owns Serbia's largest mineral water producer, Knjaz Milos.

Commission accuses Danube Foods of abuse

However, no hard evidence has to date been presented to back up this allegation.

Now the commission's chairwoman, Dijana Marković-Bajalović, told reporters in Belgrade that the group did engage in activities which created a monopoly in the market, and accused it of bad practices when it comes to the process of buying raw milk.

The commission gave Salford one month to undertake measures and correct all irregularities, she said.

"We have determined that the primary milk producers, at the moment when they sell their milk, do not know the price for it."

"At the same time, they have no access to the process of analysis, and cannot confirm the value of these analyses," Marković-Bajalović said, and added that the producers are "simply told" about the composition of the milk they sell. This information is crucial in forming the price.

Danube Group today refuted the accusations, saying that its share of the market is at 30 percent, "while a monopoly forms with 40 percent," according to Beta news agency.

But the company's executives said they will act on the commission's findings and implement its orders, even though "all other firms in the market have the same type of contracts with producers."

However, it is Salford, via Danube Foods, that owns the largest Serbian dairies, including Imlek, Impaz, Subotička, Zemunska and Novosadska. On top of that, the group owns Bambi-Banat, and co-owns Serbia's largest mineral water producer, Knjaz Miloš.

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