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Valio ordered to pay millions to local dairies in milk war ruling

A Helsinki court found the Finnish dairy giant guilty of unfair competition.

Arlan ja Valion tlkeistä kaadetaan maitoa samaan lasiin.
Dairy firm Valio has been ordered to pay compensation to two cooperative firms Image: Sari Gustafsson / Lehtikuva

The District Court of Helsinki has instructed dairy manufacturer Valio, one of Finland's largest companies, to pay a total of eight million euros in compensation to two cooperatives for selling milk at a price lower than the cost of production.

Valio will pay 4.5 million euros to the Maitomaa cooperative and EUR 3.5 million to Maitokolmio.

Additionally, the dairy firm has been ordered to pay interest on the settlement retroactively to spring 2013, and will also be liable for the legal costs of over 300,000 euros for both cooperatives.

Predatory pricing strategy

The court ruled that Valio's predatory pricing created conditions of unfair competition in the wholesale milk market and had a significant impact on the dairy business.

According to the court's decision, Valio deliberately under-priced products with the specific aim of capturing market share from other companies. Last year, Valio was forced into a settlement with rival firm Arla over price dumping.

The products that Valio were found to have fixed with lower prices included skimmed milk, low-fat milk, fat-free milk and whole milk.

However, according to the District Court, the damage suffered by the cooperatives was not as high as their claims for compensation. The Maitomaa and Maitokolmio cooperatives had originally claimed damages amounting to 17 million euros and 10 million euros respectively, but they were deemed by the court to be excessive.

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