CMA director: ‘Foster denied end-users lower prices’

The CMA said that end users paid the biggest price for Foster’s resale price maintenance

A senior director at the Competition and Markets Authority (CMA) has said that restaurants and caterers were the “ultimate losers” from price restrictions illegally imposed by Foster Refrigerator on online dealers.

The refrigeration company’s parent ITW was today fined more than £2m after admitting it broke competition law by preventing resellers from offering online discounts.

And the CMA’s senior director, Anne Pope, suggested end-users paid the biggest price.

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She stated: “Price competition from online sales is usually intense, given the ease of searching on the internet.

“ITW’s practice of setting minimum advertised prices restricted dealers from offering discounted prices online, reducing competition across online and ‘bricks and mortar’ sales, and denying buyers the benefit of lower prices for Foster’s commercial fridges.

“The ultimate losers are customers of restaurants or caterers, for whom the cost of their meal could have risen.”

Pope added that the CMA takes vertical price-fixing seriously, noting that it recently fined a supplier of bathroom fittings for similar behaviour.

“We are focused on tackling anti-competitive practices that diminish the many benefits of e-commerce across all sectors,” she commented.

Pope acknowledged that Foster’s owner ITW had pledged to introduce initiatives ensuring that it does not breach competition regulations again.

“The CMA welcomes ITW’s adoption of a compliance programme which is a positive step in ensuring it does not break competition law again and which merited a discount of 10% to the penalty,” she said.

Foster responded: “ITW Limited has accepted the findings of the CMA in relation to the online MAP policy that was operated by its division, Foster Refrigerator.

“ITW Limited takes its legal obligations extremely seriously and has fully cooperated with the CMA. It is committed to complying with relevant competition law.”

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