The Competition Authority has warned the Irish Pharmaceutical Union (IPU) it will take it and its members to court if they take "collective action" against deregulation. The authority said any collective withdrawal of services would be contrary to competition law. The union is taking legal advice.

Earlier this month, the union said it was considering the withdrawal of services and other action in its dispute with the Minister for Health, Mr Martin, over the deregulation of the sector.

Action being contemplated by the IPU includes immediate resignation from contracts with the State together with withdrawal from all State schemes, including the medical card scheme and the drug payments scheme.

In a letter faxed to the union yesterday, Dr John Fingleton, chairman of the authority, said it believed any collective action would constitute "a decision by an association of undertakings or an agreement between undertakings, which has as its object the prevention, restriction or distortion of competition within the State."

"Pleased be advised that, consequent to any further action by the IPU or collective action by its members..., the Competition Authority would institute legal proceedings against the IPU and its members for breaches of the Competition Acts 1991 and 1996."

In a press release yesterday, the authority said it was notifying the public of the warning issued to the IPU "both as a form of public notice to pharmacists generally and to indicate the authority's commitment to oppose vigorously collective market behaviour by competitors that prevents, restricts or distorts competition."

The authority said its view on the legal status of any collective action which might by taken by the IPU "is consistent with the view that the authority has taken in previous cases involving trade associations representing farmers, hauliers, travel agents and veterinary surgeons". In a brief statement, the IPU said it was a registered trade union "whose role is to promote the professional and economic interests of its members through whatever legal means are open to it".

"The union has just today received the letter from the Competition Authority (by fax) and we will be consulting our legal advisers on the matter."

The union said discussions were continuing with the Department of Health and Children with a view to bringing some stability to the sector and safeguard pharmacy services for the consumer, until such time as the Review Group (on Pharmacy Regulation) reports.