The High Court has found the Licensed Vintners Association in contempt of court over a 2008 announcement recommending that publicans should not increase drink prices for one year.
Mr Justice William McKechnie ruled that the announcement breached an undertaking given by the association when earlier competition proceedings were settled in 2003. The same decision was stated to apply to parallel proceedings involving the Vintners Federation of Ireland.
The Competition Authority had originally sued the associations in 1998 over alleged anti-competitive practices. Those proceedings ended in a settlement without admissions of liability. Among the undertakings given, the LVA agreed not to recommend to members the prices, margins, price increases or margin increases earned from alcohol sold for consumption on licensed premises.
On December 1, 2008, the LVA and VFI issued a joint statement announcing a one-year price freeze. They said publicans remained free to lower their individual prices but that members were being committed not to exceed their existing price levels.
The Competition Authority argued that this breached the earlier undertaking. The associations disputed that position and maintained that the initiative amounted to a ceiling rather than fixing particular prices.
The High Court held that contempt had to be proved beyond reasonable doubt. Applying that standard, the judge found the undertaking sufficiently clear and concluded that a recommendation to keep prices at existing levels was still a recommendation concerning prices.
The ruling is deliberately limited. It does not determine whether the price-freeze announcement itself infringed the Competition Act 2002 or European competition law. A separate undertaking concerning compliance with competition law was left for later consideration.
The court also deferred deciding what sanction or other consequence should follow from the contempt finding at the Competition Authority's request.