Dixons faces probe over pricing

UK trade secretary, Peter Mandelson, has written to the director general of the Office of Fair Trading (OFT), asking the agency to investigate whether Dixons group's pricing policy represents an abuse of a monopolistic position.

Dixons, which owns Currys, PC World and the Link as well as the Dixons chain of outlets, was criticised last week by Intel CEO, Craig Barrett, for overcharging UK consumers. This was picked up on Friday by the Consumers Association, which called for a government inquiry.

A spokesman for the OFT said: "We have received a letter from Mandelson and we are going to investigate this." He added that the process is likely to take months rather than weeks.

In a statement, Dixons said it welcomes any enquiry into UK computer prices and claimed it already offers "the most competitive PC prices in the UK". The group suggested that any such investigation should also look at tax relief on PCs.

Steve Bennett, managing director of Software Warehouse, was not convinced by Dixon's claims. "I don't think they are the most competitive but I do think an investigation is a bit unfair," he said.

Bennett claimed comparisons between average selling prices in the UK and Europe fail to take account of different specifications. He claimed Software Warehouse works on margins of around six per cent and estimated Dixons' to be as high as 12 per cent.