Vintners in contempt of court over prize freeze move

A HIGH Court judge has found two vintner’s organisations guilty of contempt of court after they introduced a one-year price freeze from last December.

Mr Justice Liam McKechnie ruled the announcements by the Licensed Vintners Association (LVA) and the Vintners Federation of Ireland (VFI) 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.

The authority previously said 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 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 organisations breached the Competition Act 2002.

After the December 1 price freeze announcement, the authority brought proceedings alleging contempt and seeking orders requiring the chief executives of the LVA and VFI to explain in court 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 act or of the undertakings previously given in court.

The authority claimed the 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 yesterday, Mr Justice 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 the 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.

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, he ruled.

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