18 September 1998

OFT to investigate complaints against assurance schemes

By Jonathan Riley

THE Office of Fair Trading is investigating a number of complaints made against the Assured Combinable Crops Scheme, its sister scheme for horticulture, the Assured Produce Scheme, and the Trade Assurance Scheme for Combinable Crops.

Jamie Day, merchanting manager with supply trade organisation UKASTA, which runs the trade initiative, confirmed that competition watchdogs in the UK and Brussels had the schemes under review.

He said UKASTA had sent information on its assurance scheme to both the Office of Fair Trading and DGIV, the EU competition directorate. Initially the OFT appeared happy, but then seemed to change its mind, sending a letter to UKASTA last week voicing concerns that parts of the scheme might restrict trade.

At the start of this week, an OFT spokesman said it had received a number of complaints about the quality assurance schemes, mainly stating that they were anti-competitive. A full investigation was not yet underway.

"Before we could do this we would have to establish that there are some grounds to the complaints concerning restrictions on competition," he said. But by mid-week the OFT said it could no longer comment on the situation. Last week, representatives of the Federation of Small Businesses, which has lodged a formal complaint with Brussels claiming the schemes are anti-competitive, met DGIV officials.

Robert Robertson, chairman of the FSBs agriculture committee, said the discussion was fruitful. He confirmed that both the horticulture and cereal schemes were under investigation. "Of particular interest to DGIV was the impact of the scheme on trade within the EU. The investigation will make a formal decision which will either outlaw the schemes or allow them to continue operating," he said.

ACCS chairman, Jonathan Tipples, said: "Although I do not want to pre-empt decisions by either the OFT or DGIV, their involvement is standard procedure and we are not concerned."

Meanwhile, Wye College has carried out a study of the ACCS sponsored by the Perry Foundation, a charitable trust which funds agricultural research projects. Food industry research director at the college Andrew Fearne said the report, due to be published later this autumn, covered attitudes and perception of all links in the crops chain, from farmers to end users.

"The long and short-term projected costs and benefits of joining have been compared and the report makes surprising and interesting reading," he said. &#42