Posted 28th Jan 2016

Ultra Finishing and Foster Refrigerator in alleged competition law breach

28th January 2016 - 10:16am
Kitchens and Bathrooms

Bathroom fittings supplier Ultra Finishing and commercial refrigeration product supplier Foster Refrigerator – a division of ITW – have allegedly breached competition law, according to the Competition and Markets Authority – CMA.

The two companies are 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”, between 2012 and 2014, according to CMA. The authority has alleged that the two cases for the businesses were both a form of “resale price maintenance” and therefore infringements of competition law.

However, the CMA pointed out that its findings are provisional, and that no final conclusion has been reached regarding whether there has been a breach of competition law in either case. Foster Refrigerator declined to comment, while Ultra Finishing issued a statement saying that it is engaging with the CMA with regard to the authority's ongoing investigation into “historic concerns within the bathroom fittings sector”.

According to Ultra Finishing, the CMA's next step in the process is to send a statement of objections to Ultra, having identified some “provisional competition law concerns about some aspects of historic practices”. Ultra is invited to respond and said it is “fully prepared” to provide a response.

The company added to “It is not appropriate for Ultra Finishing to comment further than our statement at this time, suffice to say that we are continuing to engage with the CMA to conclude appropriately. We will provide further information in due course.”

CMA director Ann Pope – who is responsible for the cases – said in the authority's announcement on the investigation: “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,” she added. “The CMA will carefully consider representations from the parties before reaching a final decision on whether the law has been infringed.”

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