Reducing the Strength: MPs ramp up calls for clarity

06 March, 2015

Politicians have heaped further pressure on the Competition & Markets Authority to ensure retailers are not being forced to sign up to illegal Reducing the Strength schemes.

Andrew Griffiths, MP for Burton on Trent and chairman of the influential All Party Parliamentary Beer Group, has written to the CMA asking it to provide greater resources to ensure that council initiatives banning the sale of certain beers and ciders do not break competition law.

His letter follows a session at the House of Lords last month where a high profile panel of MPs and Lords heard evidence about the controversial schemes from across the trade, including OLN, which has led the campaign for legal clarity.

At the hearing, the CMA acknowledged that retailers could be in danger of breaking the law if they were involved in schemes that were outside competition regulations.

Competition lawyer Martin Rees said retailers were at considerable risk of breaking competition law, which carries a penalty of up to 10% of a retailer’s turnover or as much as five years in prison.

Despite the severity of the penalties, the CMA admitted it had failed to investigate councils.

In a letter to Dan Moore, director of competitions and market, Griffiths has told the CMA it must take action.

He said: “The panel’s understanding of the CMA’s position is that you are now more concerned than you were about some of the evidence you have seen, and that you are committed to improving your effective scrutiny of such schemes and to intervening where you can within your resources. However, we are concerned that this limited commitment will prove insufficient to ensure all schemes are compliant with competition law and that those already established will be regularised.”

He continued: “We urge you to allocate suitable resources to ensuring that all activity of the sort we heard described is and remains within the law and that any illegality is pursued.

“It is clear that continuing failure to intervene will send a clear message to public authorities that they may act with disregard of the law and, as we have already seen, this can rapidly develop into serious market foreclosure for brewers and cidermakers, whether UK firms or those elsewhere in the EU, while also depriving the moderate majority of access to their favourite (legal) drinks.”

He said the CMA must ensure it gives advice to retailers – not just local authorities, who are not at legal risk – including establishing a legal advice helpline.

He added: “We take the view that since the principal competition law risks fall on the retailers, it is incumbent on you to go out of your way to protect them.”

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