The Office of Fair Trading has warned fashion retailers to be mindful of competition law following their discussions on how to pass on the 2.5 percentage point cut in VAT.
Leading fashion retailers including Topshop, Next, Marks & Spencer and New Look issued a statement on November 26 pledging to pass onto consumers the VAT cut as soon as possible. They said they were co-operating to help customers.
But the competition regulator has sent warning letters to the retailers to remind them of competition laws.
According to The Times, the OFT is concerned that discussions over the timing of the price cuts bordered on collusive behaviour, even though Chancellor Alistair Darling asked for a swift reduction in prices in the pre-Budget report.
The OFT is not expected to take any further action, but the move is understood to have angered retail chiefs, who thought it was unnecessary, bureaucratic intervention.
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