Lactalis McLelland has admitted its role in a diary price fixing scandal in which top supermarket chains and diary producers stand accused of colluding to fix the retail price diary products.

The Office of Fair Trading (OFT) today said that Lactalis McLelland had agreed to an early resolution following the OFT's Statement of Objections (SO) on 20 September last year. The SO provisionally found evidence of collusion between a number of supermarkets and dairy processors to push up the retail price of dairy products.

Lactalis McLelland was formed when Groupe Lactalis acquired A McLelland and Son Limited in 2004. According to the SO the alleged price fixing occurred before the acquisition.

The OFT said that Lactalis McLelland had admitted A McLelland and Son had taken part in anti-competitive conduct in relation to the retail prices of cheese in 2002 and 2003, and that they had agreed to pay a penalty.

In December Asda and J Sainsbury admitted that they had taken part in price fixing with diary firms in a move to help farmers.

The OFT said that the fines for those who had admitted involvement totalled £120 million. Because Lactalis McLelland have admitted their role in the scandal they will receive a smaller penalty than they might otherwise have done, on the condition that they continue to cooperate with investigations.

Morrisons and Tesco are still under investigation by the OFT.

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