Monday, 18 June 2012 06:54

Rural communities left short-changed

Written by  Ruralcity Media
Rural communities left short-changed

PEOPLE in remote rural communities are often forced to pay more for goods and services, says the government's competition watchdog.

The finding comes from the Office of Fair Trading, which has published the results of its consultation into markets in remote communities across the UK.

Around half a million people live in remote areas in the UK.

Some 500 responses to the OFT's call for evidence raised concerns about high fuel and grocery prices, and limited or high cost delivery services.

They also voiced concerns about inadequate public transport, slow internet speeds and poor mobile phone coverage.

The OFT received responses from individuals, public bodies, elected representatives, companies and voluntary organisations.

Overall, the OFT found that higher prices and limited choice in these remote areas can result from low sales volumes and weak competition, with some businesses having local monopolies.

Where local markets can only sustain a limited number of suppliers it can be difficult for consumers to get the benefits of sustained competition, the report says.

The internet increasingly offers opportunities to access a wider range of suppliers, it adds, but action may be necessary to ensure this is not hampered by delivery terms and costs.

OFT director Kyla Brand said: "The call for evidence has shown how problems of price, choice and access to goods and services mount up for consumers and businesses in remote areas.

"We can now explain how joined up approaches can succeed in making markets work well - or at least better - for those in remote areas.

"There is no quick-fix solution within the OFT's powers but we have a part to play, alongside businesses, communities and government bodies."

The OFT had taken, and was now reinforcing, steps to address the concerns raised, including analysing trends in fuel prices in the Scottish islands.

It was also publishing guidance on co-operation agreements in farming and tackling consumer protection issues in the heating oil and liquefied petroleum gas sectors.

The OFT was also working with Highland Trading Standards to improve consumer protection in relation to delivery services.

It was extending its guidance for retailers who supply remote communities on how to comply with the Distance Selling Regulations, and following up reports about breaches of competition law.

The report acknowledges that the problems identified do not all fall within the remit of the OFT because, for example, they do not relate to illegal or anti-competitive behaviour.

The study highlights initiatives in local communities which address the challenges.

These include consumers acting collectively in 'buying clubs' to reduce prices, or setting up community-based enterprises to keep local spend and profit in the community.

It also identifies ways in which business, government and enforcement partners, as well as the OFT, can play complementary roles in ensuring fair dealing by business for consumers.

Ms Brand said the OFT's report would be shared with government departments, local authorities, community groups and others to help ensure the findings informed policy discussions.

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