New report warns against pricing

08 August, 2008

Government officials are being warned not to push for minimum pricing on alcohol sales as it could result in businesses breaching the competition law.

The government's own Department for Business, Enterprise & Regulatory Reform has published guidance which, although it doesn't mention alcohol specifically, says businesses including retailers are concerned about being pressured "to enter into voluntary agreements... to deliver public policy outcomes".

It adds

this is "often in response to a particular issue that may be in the public eye through high -profile media campaigns".

The six-page report warns: "Government officials should avoid putting pressure on businesses to behave in a way which would result in the business being in breach of competition law. Businesses found to have strayed into this area face heavy fines and possibly prison."

Further, officials and ministers face "reputational risk" if a judgement against a company cites the government's role.

Minimum pricing has been seen by some sectors of government as a weapon in its war on binge-drinking.

Earlier this year the Office of Fair Trading's chief executive John Fingleton said the government could make an order under the Competition Act 1998 to allow minimum pricing of alcohol for "exceptional and compelling reasons of public policy".

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