ITW Limited, the parent company of Foster Refrigerator, has issued a terse statement in response to the £2.3m fine handed down to it by the CMA for price-fixing.
In the statement, the company referenced the CMA case number and said that it “accepted” the outcome of the investigation.
“ITW Limited has accepted the findings of the Competition and Markets Authority (‘CMA’) in relation to the online minimum advertised price policy that was operated by its division, Foster Refrigerator. ITW Limited takes its legal obligations extremely seriously and has fully cooperated with the CMA,” it said.
ITW added that it was “committed to complying with relevant competition law.”
The company ended the statement by saying that it would be giving no further comment or information on the subject.
The CMA issued a formal allegation against ITW earlier this year and revealed yesterday that it has now admitted that it engaged in resale price maintenance (RPM) in internet sales of Foster commercial fridges from 2012 to 2014.
The initial fine handed to Foster was reduced by 10% after ITW agreed to set up a comprehensive programme to train its staff in compliance with competition law and a further 20% to reflect savings due to ITW’s admission and co-operation with the CMA under a settlement agreement.
RPM is vertical price-fixing in which a supplier restricts the ability of a retailer to determine the price at which it will resell the supplier’s products, for example by requiring the dealer to sell at a particular price or only above a minimum price.
The practice is considered illegal because it stops dealers setting their prices independently to attract more customers.
The CMA said that Foster operated a ‘minimum advertised price’ policy and threatened dealers with sanctions – including threatening to charge them higher cost prices for Foster products or stopping supply – if they advertised below that minimum price.
It found that Foster’s minimum advertised price policy constituted RPM because, by restricting the price at which its goods were advertised online, it prevented dealers from deciding the resale price for those goods.
The CMA said that it “welcomed” ITW’s adoption of a compliance programme and called it a “positive step” in ensuring it does not break competition law again.