The Office of Fair Trading (OFT) has published details of a competition review it has undertaken into certain of Walkers Snacks Limited’s (WSL) trading practices which grew out of concerns expressed by third parties when the OFT was considering the acquisition by a WSL related company of certain assets from a competitor. The OFT followed up by opening a case file and inviting submissions from relevant parties.
Complaints received included allegations that WSL was dominant in the relevant market and was abusing that dominance, for example through growth rebates, financial inducements and solus agreements.
The OFT carried out extensive preliminary enquiries into the relevant markets and into WSL’s activities. It has now closed the case on the basis that it is not an administrative priority. The closure appears to have been motivated by a lack of evidence of real detriment to the market. The OFT stated that it found no evidence of rebates having a material impact on customer decision making or the process of competition generally and little evidence of other practices having such effect.
This case demonstrates that the OFT takes seriously competition law complaints about trading practices in the consumer goods sector. It investigates in detail. This case also emphasises the need for evidence of anti-competitive effect for any complaint to progress. Consumer products companies may wish to consider their own practices for vulnerability to competition law complaints. Any OFT investigation, even if it goes only to a preliminary level, is time consuming and may be injurious to reputation. The introduction of a competition law compliance programme can help to ensure competition law is understood and respected throughout large or small organisations.
For more details on the Walkers’ case, please click here.
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The original publication date for this article was 15/05/2007.
