27 February 2003 | Robin Parker
Supply chain partners will be encouraged to lift the lid on anti-competitive behaviour following a landmark ruling and record fine for price-fixing.
The Office of Fair Trading (OFT) last week fined high-street retailers Argos and Littlewoods £22.6 million - four times the previous biggest fine - for fixing the price of toys supplied by Hasbro.
Michael Grenfell, a competition specialist at lawyers Norton Rose, said the ruling sent out a clear signal of the government's toughening stance on anti-competitive behaviour. "Purchasers should be increasingly careful not to talk about prices with competitors or let suppliers dictate prices," he told SM.
Richard Collings, procurement manager at high-street pharmacists Superdrug, said the case highlighted the importance of open supplier relationships.
"Procurement shouldn't be compromised by restricted trading practices that hinder its ability to get value for money, even in a monopolistic market such as this," he said. "Treading on such dangerous ground discredits the business and the brand, and sours customers' perceptions."
Argos and Littlewoods are set to appeal against the ruling, saying it was unfounded and the investigation one-sided.
The OFT used the 1998 Competition Act to waive a potential £15.5 million fine for Hasbro, the makers of Action Man, Monopoly and Scrabble, because the company alerted it to the arrangement.