Surprise at OFT warning on retailer pledge to pass on 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

Further reading:

Retailers say cut in VAT fails to drive sales

The Times story

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