According to the NFRN: In what is a very complex set of legal arguments, the OFT is basing its reason for refusing a further review of the industry on its Prioritisation Principles that gives the OFT wide discretion on whether to take a case forward, based primarily on its assessment of potential benefit to consumers.
Arguing the case for the retail associations, their Barrister, George Peretz, made a strong case that the rationale upon which the OFT has based its Prioritisation decision does not stack up with the decisions that the OFT made in 2009 when it found numerous aspects of the industry that restricted or distorted competition, and which were detrimental to consumers, and the OFT, therefore, should be more concerned whether their recommendations of 2009 have actually improved the market. As this was not the case, it was not reasonable for the OFT to deny a review using its prioritisation principles.
In his counter argument, the OFT’s lawyer made it very evident that they were only interested in viewing the news industry in terms of its operation between publishers, wholesalers, large multiple retailers and consumers. For example, industry investment in Sales Based Replenishment, improved availability in multiple shops, the ability of large multiple retailers to seek alternative suppliers, the ability of large multiple retailers to impose fines for poor service. Of the independent retail sector, there was very little mention in keeping with the OFT’s previous description of independents as “residual retailers.” Clearly, the OFT believes that consumers are well served by the multiple retailers and they see no consumer detriment if a consumer cannot buy their favourite title from the round-the-corner newsagent and have to wait for their weekly trip into town to buy it at the supermarket.
For the NFRN Members’ representatives at the Tribunal (Alan Smith, National President, Paul Baxter, Chief Executive and David Daniel, Head of Membership Services) it was a frustrating exercise. Says Alan Smith: “It was clear from the outset that the OFT lawyer was not going to allow ‘right and justice’ to get in the way of a whole tirade of legal waffle and case-law, together with evidence that even generously could only be described as suspect, in an exercise that was more clearly directed at saving the OFT’s backside, than anything to do with an outcome that might be remotely in the best interests of consumers.”
Mr Smith concludes: “We now expect to wait at least a month or so for the outcome of the case. Given that the OFT has such wide freedom to exercise its Prioritisation principles we know we are up against it. We can only hope that the Tribunal was as unimpressed with the OFT’s arguments as we were, and overturn its decision not to have a further review of the industry.”
