In the wake of the competition and markets authority’s (CMA) conclusion of its investigation into Foster Refrigerator and minimum advertised prices imposed by the supplier on its dealers, the competition law risks currently facing the catering equipment sector are very much a hot topic.
Therefore, Giles Warrington, a competition law partner at Pinsent Masons LLP, has distilled the potential issues for the sector into the top 10 tips for staying the right side of the line.
1 Be aware of the basic rules and seek guidance if you are unsure
The consequences of infringing competition law can be severe.
These can include imprisonment for individuals (in the case of cartel agreements between competitors), significant fines for companies (of up to 10% of their worldwide turnover) and damages actions from third parties (e.g. customers who claim they have paid more as a result of an arrangement in breach of competition law).
Therefore, it is important to have knowledge of the basic rules and know when to seek advice in the case of more complex situations.
2 Avoid Resale Price Maintenance
Resale Price Maintenance (RPM) is generally considered to be automatically illegal under competition law and has given rise to fines being imposed in the past.
RPM arises where a supplier agrees with, or imposes on, a reseller of its products a fixed or minimum price at which the products may be resold.
Agreements which have a similar effect may also be caught, e.g. agreeing a minimum level of margin for the reseller, preventing discounting below a certain level or even generally preventing excessive discounting.