Frasers CFO challenges ASA on RRP rules

Frasers Group chief financial officer Chris Wootton has written to the Advertising Standards Authority (ASA), calling for a reconsideration of its rules on recommended retail prices (RRPs). He argues the guidance creates barriers to price competition and makes discount promotion harder during the cost-of-living crisis.

In a letter dated 28 August, Wootton stated the ASA was creating "unreasonable and we say unlawful barriers" to vigorous market competition. He accused the regulator of supporting retail price maintenance by brands, which he claims works against consumer interests when living costs are high.

"At a time when the cost of living crisis is rightly at the forefront of public concerns, it seems extraordinary that the ASA seems intent on making it harder for traders to promote genuine price discounts to consumers," the CFO wrote. Frasers Group maintains it uses bona fide discounts against genuine and realistic RRPs, verified through its market knowledge.

The Core Legal Dispute

Wootton's central contention is that the ASA's requirements exceed underlying law. The watchdog demands retailers prove an RRP is the price at which a product is "generally sold in the market." The CFO argues this places an undue burden on businesses.

He also highlighted what he called "perverse outcomes" under the current guidance. These include situations where an RRP cannot be used for a newly launched product. Another problematic scenario arises when a retailer is the sole seller of a specific item.

A Case Study in Pricing

The letter cites the pricing of replica football shirts as a concrete example of a broader issue. Wootton claimed England shirts were priced at £134.99 "across the board" during the recent World Cup period. He argued that certain distribution practices can restrict competition and artificially maintain higher prices for consumers.

This attack on advertising rules follows a similar critique from Frasers' leadership. Mere days before the letter, company boss Mike Ashley launched a broadside against the government, labeling its approach "delusional."

Wootton called on the ASA to "carefully reconsider its approach and guidance in relation to RRPs," describing the current position as "clearly untenable." The Advertising Standards Authority has declined to comment on the matter.