Supermarket chain Morrisons is taking legal action against the Office of Fair Trading over the naming of the retailer in a dairy price-fixing probe, it was claimed yesterday.
According to reports, Morrisons is lodging a libel suit against the watchdog, accusing it of damaging the supermarket's reputation by naming it in a list of firms provisionally found guilty of colluding to increase dairy prices.
The supermarket declined to comment, but has always denied the price-fixing allegations.
The OFT said only that there was "ongoing litigation relating to the content of a press release" and confirmed there was a continuing investigation into alleged collusion by Morrisons concerning milk prices in 2002.
Morrisons' reported legal action comes in what is expected to be a tough week for the supermarket sector.
The Competition Commission is also expected to publish possible "remedies" to address the findings from its long-running inquiry into the grocery market.
The Commission proposed a possible shake-up of the planning system in provisional findings published last October, which could give the "big four" super-markets greater scope to expand.
But the findings also suggested that UK grocery giants may be ordered to sell some of their prized landbanks after the Commission found supermarkets were stifling competition by stockpiling undeveloped land.
It is thought that Tesco is planning to fight any ruling which would force it to sell off land or stores and is reportedly lining up lawyers to take legal action against the Commission if it feels unfairly disadvantaged.
Other supermarkets are believed to be preparing similar action ahead of the final findings report.
Tesco has also said it would defend itself "vigorously" in the OFT's dairy price-fixing investigation.
Morrisons and Tesco were among five supermarkets found provisionally guilty by the OFT.
Asda, Sainsbury's and Safeway - in relation to activities prior to its takeover by Morrisons - agreed to pay combined fines of more than £116 million after admitting fixing the price of milk, cheese and butter during 2002 and 2003.
Morrisons said at the time of the provisional findings in September that it did not believe it was involved in any price collusion.
It said in a statement that objections will be made that Morrisons "should not be a part of this inquiry and that Morrisons inherited from Safeway a matter not of its making or doing".
The OFT issued a clarification of its statement of objections made last September, stressing that the provisional findings relating to Morrisons concerned milk products in 2002 only.
It also said the findings did not allege that Morrisons had been warned by the OFT that its conduct might be anti-competitive.
The price-fixing scandal is thought to have cost consumers around £270 million.
However, many of those supermarkets and dairy groups involved claim that the measures were designed to help dairy farmers at a time when they were under financial strain, following the devastating foot-and-mouth outbreak in 2001.
While the fines are yet to be finalised, Sainsbury's said last October that it agreed to pay £26 million, while dairies Dairy Crest and Robert Wiseman are expected to pay out £9.4 million and £6.1 million respectively.