Milk Wars In Icelandic Courts

The founders and former owners of the milk company Mjólka have sued the Milk Association MS (Mjólkursamsalan) for the payment of damages for prolonged and repeated violations of competition laws.

In March the national law had declared that MS was to pay 480 million ISK in administrative fines for violations of competition law and for having abused its dominant position and discriminated against its business partners when it came to selling raw milk for the production of dairy products.

Mjólka says the violations have had a serious negative impact on the company’s operations with irreversible and serious consequences for the company’s shareholders. The estimated financial damages amount to 58.9 million ISK, although indirect damage surpasses that number and resulted in Mjólka going bankrupt in 2009. (Needless to say they were not a-moo-sed.)

In 2012, Ólafur M. Guðmundsson, who previously worked for Mjólka, received an invoice from MS that was addressed at Mjólka when he himself started with KÚ, which was also buying raw milk from MS.

He then found out that MS was selling KS (Kaupfélag Skagfirðinga) raw milk at a lower price than him. So, not only the cows were being milked here. Subsequently, he reported it to the Competition Authority, which began to investigate the matter.

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