King’s Lynn firm fined £2.2 million for price fixing

Foster Refrigerator ANL-150107-164513001
Foster Refrigerator ANL-150107-164513001

A company has been fined more than £2.2 million after admitting breaches of competition law within its Lynn operations.

The penalty has been imposed by the Competition and Markets Authority (CMA) in relation to price fixing practices adopted by Foster Refrigerator, based on Oldmedow Road.

The case relates to online sales of commercial fridges between 2012 and 2014.

During that period, Foster adopted a “minimum advertised price” policy and threatened to increase charges to retailers, or halt supply altogether if they did not comply.

The practice is known as retail price maintenance, which prevents stockists from setting their own prices.

Formal allegations, which have now been admitted by the firm, were formally presented to them in January and details of the penalty were announced this week.

ITW Limited, Foster’s parent company, was fined a total of £2.298,820. However, the penalty was reduced by 20 per cent because of its admissions and co-operation, plus a further 10 per cent due to the establishment of a new training programme for staff.

Twenty other firms suspected of being involved in similar practices have also been sent warning letters.

Ann Pope, senior director of the CMA, said: “Price competition from online sales is usually intense, given the ease of searching on the internet.

“ITW’s practice of setting minimum advertised prices restricted dealers from offering discounted prices online, reducing competition across online and ‘bricks and mortar’ sales, and denying buyers the benefit of lower prices for Foster’s commercial fridges.

“The ultimate losers are customers of restaurants or caterers, for whom the cost of their meal could have risen.

“The CMA takes vertical price-fixing seriously, and recently fined a supplier of bathroom fittings for similar behaviour.

“We are focused on tackling anti-competitive practices that diminish the many benefits of e-commerce across all sectors.

“The CMA welcomes ITW’s adoption of a compliance programme which is a positive step in ensuring it does not break competition law again and which merited a discount of 10 per cent to the penalty.”

In a statement, Foster’s parent company, ITW, said: “ITW Limited has accepted the findings of the CMA in relation to the online minimum advertised price policy that was operated by its division, Foster Refrigerator.

“ITW Limited takes its legal obligations extremely seriously and has fully cooperated with the CMA. It is committed to complying with relevant competition law.”