OFT denies agreement on minimum pricing

The Office of Fair Trading (OFT) has denied it has given government ministers the green light to introduce minimum pricing on alcohol.

Weekend press reports said the OFT had "cleared the move" for ministers to enforce a minimum price for beer, wine and spirits, in the light of supermarkets ignoring Budget tax increases.

But when asked if the OFT had agreed the move, a spokesman said: "We haven't, that's not right."

He also warned against the idea of supermarkets fixing a minimum price. "Any attempt to fix the price of alcohol between supermarkets would fall foul of competition laws," the spokesman added. "It would be engaging in cartel activity. Every supermarket has to decide the price of alcohol itself."

However hopes of minimum pricing being introduced have been raised by business minister Pat McFadden, who said an exclusion order under the Competition Act was "one of the possible measures for consideration" in tackling alcohol pricing.

OFT chief executive John Fingleton also said in a letter to MP John Grogan that an exclusion could be made where there are "exceptional and compelling reasons of public policy".

The letter added: "The Secretary of State would need to consider whether the proposed exclusion may be considered a proportionate measure that is necessary to the achievement of clearly defined public policy benefit."

Grogan hosted a seminar at the House of Commons last week, where MPs and industry representatives heard how a minimum pricing system operates in Canada.

Any chance of action could rest on a Department of Health report, due to be published in July, looking at the impact of cheap supermarket deals.