FALLOUT OVER PRICE FIXING
By Tony Halstead and Tom Stainer Two leading trade bodies are at loggerheads over the controversial issue of minimum price fixing schemes. The British Beer & Pub Association (BBPA) is pressing again for action from the Office of Fair Trading (OFT) to get price rigging declared anti-competitive, arguing such practices create an artificial market. But the Bars Entertainment & Dance Association (BEDA) has claimed price controls are essential to curb binge-drinking as rival late-night bars vie with one another to attract extra trade with cheap drinks.The Government has no policy on minimum pricing although Licensing Minister Kim Howells has stated that he believes happy hours that encourage binge-drinking should be restricted. The issue flared up once again this week after revelations that a bar in Newcastle-upon-Tyne was selling alcopops and vodka shots for just 10p each. The BBPA has revealed it is to meet the OFT in a bid to persuade officials to reverse its earlier ruling that price fixing was legal. The organisation believes that schemes similar to the one operating in Perth and Kinross are already in the planning stage in Glasgow, Bolton, Middlesbrough and other towns across Britain. The OFT has given the green light to a scheme in Perth where the licensing authority has imposed minimum pricing on drinks as part of late-night permit conditions. It says imposition of price controls is legal if it is imposed by a regulatory authority rather than bar operators banding together to create a cartel. There is already speculation that other local authorities south of the border are now drawing up similar schemes to control pricing of drinks in late night venues. BBPA spokesman Mark Hastings said: "This is creating an artificial market and what happens is the minimum prices will creep higher and higher." The association is fearful of the long-term effect this may have on the on-trade as a result of channeling sales into off-licences where no controls operate. But BEDA remains adamant that controls are necessary to stop bar operators in town and city centres using price irresponsibly to establish a point of difference and attract customers through their doors. It admits low prices are a consequence of an "over-heated" high street market but insists controls are necessary. Chief executive Jon Collins said: "If there is no regulation or code of practice then you will get operators using price to establish a point of difference." The OFT said it did not rule out the possibility of a reversal of its decision if "strong anti-competitive evidence" was presented although reversals were rare.
