THE COMPETITION Authority is seeking to have the chief executives of two publicans’ organisations brought before the High Court to explain why they should not be jailed and their organisations’ assets seized for alleged contempt arising from their announcement of a drinks price-freeze.
The authority claims a price freeze, especially during a recession, is likely to result in substantial consumer harm, is banned under competition law and breaches undertakings given to the court in settlement of earlier proceedings.
It is seeking orders for the chief executives and council members of the Licensed Vintners’ Association (LVA) and the Vintners’ Federation of Ireland (VFI) to be brought before the court to explain why they should not be imprisoned for contempt and/or should not have the assets of their organisations seized.
The authority alleges that the announcement by the LVA and the VFI on December 1st last of a one-year freeze of the price of drinks in pubs, with immediate effect, is in breach of previous separate undertakings given to the court as part of a settlement of proceedings by the authority against the two publicans’ organisations over alleged drink price-fixing.
Paul Sreenan SC, for the authority, yesterday secured leave from Mr Justice Liam McKechnie to serve short notice of the proceedings on the LVA and the VFI. The judge returned the case to Friday.
The applications arise from a 2003 settlement of legal proceedings brought by the authority in 1998 against the Licensed Vintners’ Association and a 2005 settlement of proceedings against the VFI.
In the action against the LVA, which represents some 700 publicans in the Dublin area, it was alleged to be involved in price-fixing of alcoholic drinks in the Dublin area in 1996 and 1997.
That action was settled without admission of liability in December 2003.
Under the settlement, the LVA gave a number of undertakings to the court, including not to breach provisions of the Competition Act 2002 regarding the sale and price of alcoholic drinks in licensed premises owned, managed or controlled by LVA members.
The LVA also undertook not to record to its members the prices and margins earned on the sale to the public of drinks sold on premises owned, managed or controlled by the association’s members.
The action against the VFI, which represents some 5,000 publicans outside the greater Dublin area, was settled in May 2005 – also without any admission of liability.
The VFI, which denied making recommendations to its members in 1996 and 1997 with the object of directly or indirectly fixing profit margins at which drinks were sold in pubs, also gave undertakings not to recommend prices or price increases to members.
In its latest proceedings, the authority contends that the price freeze announced by the LVA and VFI on December 1st last infringes the undertakings given by both publicans’ organisations, and also breaches provisions of the Competition Act 2002.
Both organisations had claimed to the authority last December that they had secured legal advice indicating that this was not the case.
The authority subsequently served a “cease and desist” request on both organisations, who were given until Monday last to comply.
However, both organisations had repeated their view that they were not in breach of the Act or of undertakings to the court.
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