Information Bulletin
03 May 2004
Shetland Supplier of Calor Autogas Gives Assurances on Pricing
Rearo Suppliers Limited, the sole supplier of Calor Autogas in Shetland, has given the Office of Fair Trading (OFT) assurances that it will not agree with retailers to set prices.
Following a complaint from a consumer, Shetland Islands Council's Trading Standards Service brought the retail pricing of Calor Autogas in Shetland to the attention of the OFT's Cartels Investigation Branch and assisted the Office in investigating the local situation.
Rearo Supplies Limited has now given assurances that it will not enter into any future agreement with retailers which seeks to set prices, and the OFT has therefore decided to close its investigation.
Vincent Smith, Director of Competition Enforcement at the OFT, said:
'Retailers should be free to set the price of goods and services independently. Price fixing by suppliers removes price competition between retailers, reducing consumer choice.'
David Marsh, Shetland Islands Council's Service Manager - Trading Standards, said:
"We are pleased to have been able to work together with the Office of Fair Trading to achieve this result. We are always keen to hear from anyone in Shetland who is concerned about the fairness of the local trading environment."
There is no suggestion that Calor Gas Ltd, the manufacturer of Calor Autogas, is implicated in the OFT's investigation.
Ends
NOTES
The OFT investigated Shetland's local supplier of Calor Autogas, Rearo Supplies Ltd, along with four retailers: Mainlands, J & K Anderson, Brae Stores Ltd and J Burgess Garage.
Calor Autogas is a brand of liquefied petroleum gas used as a fuel substitute for petrol.
The Chapter I prohibition of the Competition Act 1998 covers anti-competitive agreements between undertakings. The Act gives the OFT powers to investigate if it has reasonable grounds of suspecting that an undertaking is infringing the Chapter I prohibition and powers to impose fines up to a maximum of 10 per cent turnover.
An agreement will infringe the Chapter I prohibition only if it has as its object or effect an appreciable prevention, restriction or distortion of competition in the United Kingdom. the OFT takes the view that an agreement will generally have no appreciable effect on competition if the parties' combined share of the relevant market does not exceed 25 per cent, although there will be circumstances where this is bill not be the case. One example is agreements which explicitly and directly fix prices, or the resale prices of any product or service are likely to infringe the prohibition. The OFT believes that such price fixing agreements are capable of having an appreciable effect on competition.