THE COMPETITION Authority says it is examining a one-year price freeze announced yesterday by more than 5,500 publicans to see if it conforms with competition law.
The price freeze was announced with immediate effect by the Licensed Vintners Association, which represents publicans in Dublin, and the Vintners Federation of Ireland, representing publicans in the rest of the State.
Three years ago the vintners settled legal proceedings taken by the authority over alleged price-fixing in the 1990s. At the time they undertook not to recommend to members the price or margins to be earned on the sale of drinks.
Yesterday the two groups told a press conference they had taken legal advice and were satisfied they were acting within the law.
"We're not advocating that our members sell at any particular agreed price points and it is a matter for each publican to decide upon their own resale prices," said Val Hanley, chairman of the VFI.
Asked if they had consulted the authority, they said they had notified it "of everything we're doing".
A spokeswoman for the authority said it was monitoring the situation. "We received a copy of the press release from them today. That's the only correspondence we have had with them in relation to the matter; there has been no other consultation."
According to the two vintners' bodies, price differentials between, for example, urban and rural pubs will remain, but publicans will be free to drop their prices if they choose.
Donal O'Keeffe, chief executive of the LVA, also said he expected most publicans would absorb the 0.5 per cent VAT increase which came in yesterday.
Mr O'Keeffe said the pub trade recognised there was huge pressure on consumer spending, with falling real incomes and rising unemployment. While the trading environment for pubs was difficult, it would get even tougher next year.
"We believe the freeze will be honoured by the vast bulk of our members across the country."
More than 1,500 pubs, mostly in rural areas, have closed since 2001 as a result of a downturn in business blamed on the smoking ban and increased Garda monitoring of drink-driving.
Alcohol sales fell 7 per cent between 2001 and 2007 and a further 8 per cent this year alone.
While rural pubs have been worst hit, urban bars are also feeling the pressure.
Last week Thomas Read Holdings, the owner of some of Dublin's best-known pubs, sought court protection from its creditors.
