Foster faces internet price fixing allegations

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An 18-month investigation into alleged price fixing in the commercial catering equipment sector today took a new twist this morning after the Competition & Markets Authority (CMA) publicly accused Foster Refrigerator of breaching competition law.

The CMA has been investigating suspected breaches of competition law relating to “vertical arrangements between certain suppliers and resellers” since August 2014, but Foster is the first company to be officially named in connection with the case.

Foster is accused of preventing dealers from selling its products below a certain price online through the use of a ‘minimum advertised price’ policy.

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In the same announcement, the CMA also accused bathroom fittings supplier Ultra Finishing Limited of the same practices. It is part of an investigation into the bathroom fittings market that is separate to the one taking place in the catering equipment sector.

The CMA stated: “Each is alleged to have introduced a minimum advertised price for internet sales, which effectively limited the ability of retailers of their products to make online sales below a specified price level. The CMA alleges that both cases were a form of resale price maintenance and infringements of competition law.”

The CMA noted that its findings are provisional and that “no final conclusion” has yet been reached regarding whether there has been a breach of competition law. It did not give any indication of when a final judgement will be made, although its website states that it expects to take receipt of “written and oral representations” between February and May 2016.

Ann Pope, the CMA Director responsible for Foster’s case, said: “The internet has driven innovation in retail markets. Where ‘traditional’ businesses operating through bricks-and-mortar shops face intense price competition from online sales, suppliers may be tempted to respond by introducing practices, like minimum advertised prices, that restrict such competition.

“Retailers should be free to set their own sales prices online. This drives competition among rival retailers because they compete to attract consumers who are using the internet to shop around for the best deals.”

The CMA said it will “carefully consider” representations from the parties before reaching a final decision on whether the law has been infringed.

In a statement issued to FEJ and its sister publication Catering Insight this morning, Foster said: “Foster has noted the provisional conclusions of the Competition and Markets Authority outlined in its press release this morning. Foster is committed to complying with relevant competition law and is cooperating fully with the Competition and Markets Authority. Whilst the investigation is ongoing Foster will make no further comment at this time.”

Tags : catering equipmentFosterRefrigeration
Andrew Seymour

The author Andrew Seymour

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