Surprise at OFT warning on retailer pledge to pass on VAT cut
10 Dec 2008, AccountancyAge.com, AccountancyAge
http://www.accountancyage.com/aa/news/1757254/surprise-oft-warning-retailer-pledge-pass-vat-cut
Competition experts have expressed surprise at the Office of Fair Trading (OFT)'s warning letter to leading fashion retailers, after they publicised they would pass on to consumers the 2.5 percentage point cut in VAT, some saying OFT lacked 'common sense'.
Leading fashion retailers, including Sir Philip Green and Sir Stuart Rose, received the warning letter, urging them to be mindful of the competition law after Topshop, Next, Marks & Spencer and New Look issued the statement following a decision by the fashion bosses that a joint approach would minimise confusion for customers, The Times reports.
OFT is said to have been concerned discussions over the timing of the price cuts bordered on collusive behaviour, despite Darling asking for a swift reduction in prices during the Pre-Budget Report.
Although OFT is not expected to take the matter any further, its action has angered retail chiefs, who regard it as an unnecessary, bureaucratic intervention.
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Visitor comments
How long has complying with the law been anything to do competition?
This seems to show how misguided the authorities are to get involved in yet another pointless exercise particularly as traders do not have any choice over whether they comply with changes in the law. In any case the effect of the VAT reduction is lost in the much more significant blanket discounting that is going on.
Posted by: P Pearce , 10 Dec 2008 | 00:00