A timely reminder on pricing

While I am a great supporter of Pubwatch and also of good liaison with the police, I cannot lend my wholehearted support to a system that seeks to enforce a price cartel by suspending a pub that has breached an agreed lower limit.

This type of scheme has in the past attracted the attention of the Office of Fair Trading (OFT), which has previously written to police forces advising them of the law. It seems the advice needs repeating on regular occasions.

The fact that the local authority and the police are also involved in the relevant pubwatch scheme does not legitimise any action among members which seeks to set minimum pricing. This is not the action of a Government or official organisation and as such falls foul of the rules against trade agreements of this kind. The mere fact of imposing a sanction against someone who breaches it actually compounds the illegal act.

It may be legal for the proposal in Scotland for some kind of legislation against low-priced drinks to be carried forward. But that is a different issue.

Those who have supported the scheme - for sound commercial reasons of their own - should recognise that it may be inappropriate for the police to get involved in what is essentially a trading issue, however much they dress up the social importance of not having cut-price drinks. The problem is in knowing where to draw the line in such circumstances.

You can rightly and actively encourage retailers to engage in responsible retailing - as this newspaper so successfully does - or you can set a fixed limit. The former is much to be applauded; the latter raises restraint of trade issues.

There is also the context of the ban. A rigid limit set even for a finite promotion does not seems to me to be appropriate. All traders want to have some form of incentive to customers, while retaining the right to fix their own regular prices so as to make a profit. This in itself is not a social evil.

It may be that this minor spat will have passed by the OFT and they will not investigate. But it might be appropriate for the advice they issued back in 2004 to be resurrected, so that the police know what the competition law implications are of what they may propose at local level.