Vintners found guilty of contempt

The High Court  has found two publicans' organisations guilty of contempt of court in announcing a one year drinks price freeze effective from last Decemeber.

Mr Justice Liam McKechnie ruled that announcements on December 1st last by the Licensed Vintners Association (LVA) and the Vintners Federation of Ireland (VFI) of the one year freeze on the price of drinks sold in pubs amounted to contempt of an

undertaking previously given by both to the court in 2003 in settlement of proceedings over alleged drink price fixing.

The judge said he “gladly acceded” to a request from the Competition Authority to defer even a consideration of the consequences of his finding and expressed the hope no further imposed order would be required from the court.

The authority had previously told the judge it did not wish to see any persons jailed or assets seized and required only that the 2003 undertaking be complied with.

The judge also stressed his finding of a breach of undertaking was “entirely based” on an interpretation of the 2003 undertaking and he had “in no way” drawn any conclusion whether or not the recommendations by the publicans’ organisations breached provisions of the Competition Act 2002.

After the December 1st announcement of the price freeze, the authority had brought the proceedings alleging contempt and seeking orders requiring the CEO’s of the LVA and VFI come before the court to explain why they should not be imprisoned for

contempt or have the assets of their organisations seized.

The authority claimed a price freeze, especially during a recession, was likely to result in substantial consumer harm and breached the Competition Act 2002.

The LVA and VFI both denied any breach of the Competition Act or of the undertakings previously given to the court and said their legal advice was they were not in breach.

The authority’s applications arose from the 2003 settlement of proceedings brought by it in 1998 against the LVA and VFI. That settlement, made without admission of liability, included undertakings by both not to recommend prices to their members relating to alcoholic drinks in licensed premises.

The authority claimed last December’s press release about the price freeze amounted to a recommendation from the publicans to their members in relation to the price of drinks contrary to those undertakings.

In his reserved judgment today, Mr Justcie McKechnie stressed he was dealing only with the issue of whether the December release was in contempt of one undertaking given by the VFI and LVA under the 2003 settlement.

He found that 2003 undertaking was not restricted to preventing any recommendation on specific price fixing but also related to any recommendation that prices should be increased, lowered, held at their current levels or held subject to an individual publican’s right to charge less than current levels.

He went on to rule the press release must be construed as a recommendation as to the prices charged by publicans for the sale of alcoholic drinks on their premises.

The release referred to a “one year price freeze in drink prices”, to the initiative for the price freeze coming from the members themselves and to the members’ commitment not to exceed over the coming 12 months the prices currently applied by them to drink.

The entire thrust of the release was a communication to the public regarding prices and he could not see how it could avoid being captured by the undertaking, the judge said. A member of the public would certainly feel the recommendation related to the price they would pay.

In those circumstances, the release amounted to a breach of the 2003 undertaking and constituted contempt of court, he held.