The assurances cover milk delivered to small retailers

It has been alleged that Robert Wiseman and three other Scottish dairies have been fixing the price of milk in the market which takes in small local retailers.

The OFT says it has reasonable grounds to suspect an infringement of the Competition Act, however, it has not come to a final decision.

The price cap threat was an interim measure announced by the government body in June.

Assurances from the milk company mean that, instead of being forced to peg the price of milk to the lowest prices in the Highlands, Wiseman has agreed to ensure that its prices to Highland outlets "cover costs".

Chairman Alan Wiseman said: "We have worked positively and constructively with the OFT to arrive at these assurances.

"We are giving the assurances voluntarily and without prejudice to the outcome of the ongoing investigation, which we remain confident will vindicate the company's stance."

Series of allegations

The assurances apply to middle-ground customers - those customers who are not supermarkets or supplied by doorstep deliveries.

It was announced in February last year that Wiseman Dairies would face an inquiry by the Competition Commission for alleged anti-competitive trading.

The firm, which has a 70% share of the Scottish milk market, was accused of market sharing, price discrimination, exclusive dealing and predation.