Scottish milk giant Robert Wiseman is to be investigated by the Competition Commission for alleged anti-competitive trading.

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

OFT director general John Bridgeman has confirmed the widely predicted monopoly inquiry after a complaint was lodged against the company.

Investigators will attempt to establish whether a monopoly exists in the supply of fresh processed milk to retailers other than the large supermarket chains.

The supply to large supermarkets is considered to be a separate market and not subject to complaint.

Mr Bridgeman said: "I am asking the Competition Commission to make a detailed study of barriers to entry, such as high transport costs, in this market to help assess allegations of anti-competitive behaviour made against Robert Wiseman Dairies Plc, the largest player, with a market share of over 70%."

Company chairman Alan Wiseman said: "We are confident that the Competition Commission will find that Wiseman has not behaved in an anti-competitive way, but merely responded commercially to aggressive competitor activity which, we believe, represents an attempt to deter us from our expansion in England."

He added: "One of our biggest competitors, in fact the biggest dairy company in the UK, has come to Scotland now and bought a dairy in Inverness and is using that dairy to compete vigorously with Wiseman's.

"We felt that it was only right that we compete with them on a like for like basis and we seem to have fallen foul of the fact that we have such a large market share.

"This allowed our competitors to complain about that market share in Scotland."

The firm, which is based in East Kilbride, has recently made moves into the English market.

The firm opened a dairy in Manchester in 1995 and is planning to open a �30 million dairy at Droitwich, near Birmingham.

It has, however, been hit by a downturn in profits and last month blamed the 'extremely competitive' market in Scotland for the deterioration.

Rival milk supplier Claymore Dairies said it welcomed the investigation and said it would co-operate fully with the inquiry.

The company's share price, at a low for the year, was off 0.5p at 95p in early trading.