UK grocery sector: retailers and suppliers price coordination

Office of Fair Trading (OFT) closed investigation into suspected price coordination involving a number of retailers and suppliers in the UK grocery sector.

From:
Competition and Markets Authority
Published
1 November 2010
Case type:
CA98 and civil cartels
Case state:
Closed
Market sector:
Retail and wholesale
Outcome:
CA98 - administrative priorities
Opened:
1 April 2008
Closed:
1 November 2010

Case information

Issue: suspected breaches of competition law by a number of retailers and suppliers.

Relevant provision: Chapter I prohibition, Competition Act 1998.

  1. In April 2008, following the receipt of substantial evidence from more than one source, the OFT opened a formal investigation under the Competition Act 1998 (the 'Act') into suspected breaches of competition law by a number of retailers and suppliers, across a range of product areas in the UK grocery sector (see note 1).

  2. The investigation examined whether suspected indirect retail price co-ordination involving suppliers and retailers had occurred between 2005 and early 2008 (so called A-B-C information exchanges) across a number of products.

  3. As part of this investigation, the OFT has conducted a thorough review of a significant body of material (including material provided by several leniency applicants) (see note 2). This review process also involved the OFT seeking further information from many parties.

  4. Following the conclusion of this review, the OFT considered the future of the investigation in light of its prioritisation principles and concluded that it was appropriate to close the investigation on administrative priorities grounds. In reaching this decision, the OFT also had careful regard to comments from the parties under investigation.

  5. The decision to close this investigation on administrative priority grounds does not amount to a statement as to whether a party acted illegally and nor should any implication be taken that any party was acting illegally.

  6. The following considerations were collectively relevant in the OFT reaching this conclusion:

  • the impact of pursuing the investigation given the apparent positive influence of competition compliance initiatives across the sector

  • the deterrence impact and strategic significance of pursuing the investigation, given the OFT's previous and ongoing competition enforcement involving indirect information exchange, and

  • the resource implications of pursuing the investigation.

  1. The decision to close this investigation should not be taken to imply that the OFT would not prioritise suspected A-B-C information exchanges in the future.

  2. The OFT wishes to support business seeking to achieve a competition law compliance culture and has been working with business and other groups to do so (see note 3). It is currently consulting on two guidance documents that aim to help businesses and company directors comply with competition law. It is also considering future work to assist businesses to comply with competition law.

Notes

  1. By virtue of section 25 of the Act, the OFT may commence an investigation where there are reasonable grounds to suspect an infringement of the Chapter I and/or Chapter II prohibitions of the Act.
  2. Under the OFT's leniency policy, a company may seek leniency where there is a concrete basis for suspicion that it has engaged in behaviour which has breached certain types of competition law. The receipt of a leniency application does not mean that the OFT will automatically find an infringement of competition law has occurred.
  3. Further details on this can be in the press release OFT consults on competition compliance guidance (19 October 2010).
Published 1 November 2010