OFT forced to pay costs on Pernod’s Bacardi row

In a highly unusual ruling, the Office of Fair Trading (OFT) has been ordered to pay the bulk of the legal fees incurred by Pernod Ricard in its appeal on the Bacardi dispute. This is a second blow to the regulator in the long-running case.

In a highly unusual ruling, the Office of Fair Trading (OFT) has been ordered to pay the bulk of the legal fees incurred by Pernod Ricard in its appeal on the Bacardi dispute. This is a second blow to the regulator in the long-running case.

The Competition Appeals Tribunal (CAT) last month ordered the OFT to pay 75 per cent of Pernod’s costs incurred in fighting its CAT appeal. The appeal was led by DLA Piper Rudnick Gray Cary, with partners Mike Pullen, Martin Rees and assistant Kate Vernon instructing Nick Green QC and Aidan Robertson of Brick Court Chambers.

The spat stemmed from agreements by Bacardi that excluded competitors in the white rum market from pubs and bars. In 2002, the OFT proposed to find that Bacardi had engaged in anticompetitive conduct, but it backed down after the drinks company gave voluntary undertakings. Pernod appealed to the CAT last year, challenging the OFT’s ability to accept voluntary undertakings in the absence of consultation with the complainants.

Last June, the CAT delivered a preliminary ruling against the OFT. The ruling will ensure that in future all complainants will have the right to be consulted on voluntary undertakings and that they must be shown the Rule 14 notice evidence against the company under investigation.

The matter ended in April, just before the start of a second hearing, when Bacardi proposed amendments to its undertakings that were accepted by both Pernod and the OFT.

“We’re very satisfied with the outcome of the appeal. We’ve achieved everything we told the client we’d achieve,” said Pullen.

The resolution brings to an end a bitter and long-running dispute between Pernod and Bacardi, which saw DLA Piper slap a Freedom of Information Act request on the OFT in January this year.

Simmons & Simmons partner Tony Woodgate advised Bacardi, instructing James Flynn QC of Brick Court, while the OFT turned to Monckton Chambers’ Jon Turner and Kassie Smith.