The Competition Authority considers that Osta- og smjörsala sf. has abused its dominant market position vis-à-vis Mjólka ehf., thereby breaching competition law.
When Mjólka started operations last year with the production of feta cheese, the company had to buy milk powder from the Cheese and Butter Sales. There have been two pricing structures for milk powder: a higher price for companies in the dairy industry, and a lower price for companies in other food production. Mjólka was made to pay the higher price for the powder, whereas another cheese-making company, Ostahúsið, had for many years been charged the lower price for its production. This prompted Mjólka to complain to the Competition Authority about the Ostasala and Smjörsala's discrimination. The Ostasala and Smjörsala responded by raising the price of milk powder for the Ostahúsið, citing a staff error. The company believed this would level the playing field between Mjólka and the Ostahúsið.
The Cheese and Butter Sales has a monopoly on the sale of milk powder in this country, as high tariffs on milk powder effectively prevent its import. Mjólka is therefore forced to buy powder from the Cheese and Butter Sales Company, which, together with its owners (the dairy co-operatives), are Mjólka's main competitors. Due to the position of the Cheese and Butter Marketing Board as described here, the company has a particularly strong obligation not to discriminate between its customers. In light of this, the Competition Authority considers that the Cheese and Butter Shop abused its dominant market position when it sold milk powder at different prices to Mjólka on the one hand and Ostahúsið on the other. In doing so, the Cheese and Butter Shop breached competition law.The decision.
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