This morning while struggling to beat off my cold enough to get out of bed at least, I listened to a discussion on BBC Radio 4’sToday programme about what action, if any, can be taken to prevent supermarkets selling booze as cheaply as they do – this is needed, some think, to tackle binge-drinking, although I’m not sure anyone could get drunk and anti-social on the kind of beer supermarkets sell for 22p a can. Isn’t vodka more of a problem?
Anyway, Lucy Neville-Rolfe of Tesco argued that her firm could not lawfully agree with others to increase booze prices: that would amount to price fixing, contrary to article 81 of the EC Treaty. She was backed up by a competition lawyer from DLA Piper (sorry, I can’t remember his name: I’ll keep blaming the cold) who said that if supermarkets got together over this the OFT would be “down on them like a ton of bricks”. They agreed legislation would be needed to tackle the problem.
Later on, the MP and former competition minister Nigel Griffiths said he thought supermarkets could lawfully get round a table with the OFT and agree increased prices – all very cosy and nice, if he’s right. But surely he can’t be. It seems to me that Lucy and the lawyer must have it right: any agreement between undertakings to fix prices would be squarely ruled out by article 81, and the involvement of government would help not a jot. Indeed in a way it’d make it worse, because if the OFT lent itself to such a plan, it’d be failing in its duties under Regulation 1/2003 and the Commission would need to step in, not only to put a stop to the cartel but also potentially to take infingement action against the UK in the shape of its national competition authority the OFT, for acting in breach of EC law.
I don’t even think the supermarkets could tacitly do this – that’d be a concerted practice having the effect of limiting price competition, so would also breach article 81.
Am I missing something or is the former competition minister barking entirely up the wrong tree?
Talk not to me of Tesco’s – I resent the fact that I am compelled to shop there due to relative poverty; Given that Cartel behaviour is notoriously difficult to demonstrate, what else can be done by CoCo to slap Tesco’s upside its huge and flubby head?