The Office of Fair Trading has reiterated its warning to the industry that any coordinated efforts to introduce voluntary codes in line with the government’s food and health agenda could fall foul of competition law.
It has advised the British Retail Consortium and the Food Standards Agency that voluntary codes could be seen as restricting consumer choice, breaching the Competition Act.
The move, which industry bodies fear could undermine efforts to address issues such as poor diet and binge drinking, follows similar advice given to the Food and Drink Federation as it drafted its manifesto. The latest warnings were cited at a stakeholder group meeting on September 30 at which a code of practice for the labelling of added water in meat products was discussed.
Minutes shown to The Grocer revealed that the BRC and MLC were forced to withdraw from discussions “because they had been advised by the OFT that any such agreements would mean certain products would disappear from the marketplace, restricting consumer choice and increasing prices. This would breach the Competition Act.”
The BRC’s director-general Kevin Hawkins said: “The OFT is keen to scrutinise anything
that resembles a collective agreement or understanding between retailers, producers and suppliers that could in any way restrict consumer choice.” He added that having focused in the past on price, it now appeared to be trying to widen the interpretation of the Act to include product composition. He said: “Ingredients are new territory and do seem to be stretching the point.”
The OFT’s bullish stance raised the absurd prospect of voluntary codes that were not widely followed being allowed, but those that were adopted being disallowed, he added.
David Southwell, BRC director of corporate affairs, said that the move called into question the role of the FSA. “If it emerges that it is acting ultra vires, for many retailers it will be a huge relief.”
An OFT spokesman said: “We haven’t been asked to look at any specific proposals. We’ve been working with various parties to ensure nothing infringes the Act.”
Liz Hamson
It has advised the British Retail Consortium and the Food Standards Agency that voluntary codes could be seen as restricting consumer choice, breaching the Competition Act.
The move, which industry bodies fear could undermine efforts to address issues such as poor diet and binge drinking, follows similar advice given to the Food and Drink Federation as it drafted its manifesto. The latest warnings were cited at a stakeholder group meeting on September 30 at which a code of practice for the labelling of added water in meat products was discussed.
Minutes shown to The Grocer revealed that the BRC and MLC were forced to withdraw from discussions “because they had been advised by the OFT that any such agreements would mean certain products would disappear from the marketplace, restricting consumer choice and increasing prices. This would breach the Competition Act.”
The BRC’s director-general Kevin Hawkins said: “The OFT is keen to scrutinise anything
that resembles a collective agreement or understanding between retailers, producers and suppliers that could in any way restrict consumer choice.” He added that having focused in the past on price, it now appeared to be trying to widen the interpretation of the Act to include product composition. He said: “Ingredients are new territory and do seem to be stretching the point.”
The OFT’s bullish stance raised the absurd prospect of voluntary codes that were not widely followed being allowed, but those that were adopted being disallowed, he added.
David Southwell, BRC director of corporate affairs, said that the move called into question the role of the FSA. “If it emerges that it is acting ultra vires, for many retailers it will be a huge relief.”
An OFT spokesman said: “We haven’t been asked to look at any specific proposals. We’ve been working with various parties to ensure nothing infringes the Act.”
Liz Hamson
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