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OFT launches bra price-fixing investigation

Patrik Giardino | Getty Images

The U.K.'s antitrust watchdog has launched an investigation into whether some of the country's largest department stores had fixed the price of sports bras with a manufacturer.

A "Statement of Objections" from the U.K.'s Office of Fair Trading (OFT) alleged that John Lewis, Debenhams and House of Fraser entered into a total of nine "anti-competitive" agreements with bra manufacturer DB Apparel to artificially inflate the price of DBA's Shock Absorber brand of sports bras.

The investigation focuses on the period between 2001 and 2008, the OFT said, when Shock Absorber bras were one of the U.K.'s leading brands with around 15 percent of the market share. DBA Apparel, which is based in France, also makes bras for brands including Playtex and Wonderbra.

The OFT's "provisional view" was that the manufacturer and the department stores had entered into "resale price maintenance" – an infringement of competition law which sees a supplier and retailer agree on a product's resale price.

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However Ann Pope, the watchdog's senior director of services, infrastructure and public markets, stressed that no assumption should be made at this stage that there had been an actual infringement of the law.

"Resale price maintenance limits competition between retailers and can lead to consumers paying higher prices," Pope said. "We will carefully consider the parties' representations to the Statement of Objections before deciding whether competition law has in fact been infringed."

A DB Apparel spokesperson on Friday rejected the OFT's allegations.

"We have been transparent with U.K. authorities since the beginning of this process and will continue to defend ourselves vigorously in this investigation," they said.

The department stores under investigation - John Lewis, Debenhams and House of Fraser – are three of the biggest names in British retail, with numerous branches across the country.

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A statement from Debenhams on Friday said it disagreed with the OFT's allegations.

"Debenhams disputes these provisional findings of the OFT but is not in a position to comment further at this stage. The matter is being dealt with by its external lawyers," the company's statement said.

A spokesperson for John Lewis said it was fully cooperating with the OFT, adding: "John Lewis always strives to operate within the law and comply with regulations."

House of Fraser also said it was co-operating with the watchdog, and would respond accordingly.

"We are confident that we have been operating within all laws and regulations and are very supportive of any initiative which ensures pricing policies are fair for our customers," a House of Fraser spokesperson said on Friday.

ByCNBC's Katrina Bishop. Follow her on Twitter @KatrinaBishop

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