ASDA, the supermarket chain, accused the peers of ignoring consumers' interests and warned they "could legally enshrine price-fixing by manufacturers on everyday medicines and vitamins".
The Consumers' Association attacked the Lords' decision as a "tax on the infirm" and said it would mean people would continue paying inflated prices for over-the-counter medicines.
The defeat - the third for the Government in a week - came during the final stages of the Competition Bill when a cross-party amendment was approved by 138 to 81to stop the Office of Fair Trading challenging resale price maintenance on over-the-counter medicines in the retrictive practices court.
The President of the Board of Trade, Margaret Beckett, could seek to overturn the defeat in the Commons, but the Government now faces a dilemma. Frank Dobson, the Health Secretary, and a group of 133 Labour MPs are backing the pharmacists, who warn they will be forced out of business if supermarkets are allowed to slash the price of non-prescription drugs.
The community pharmacy action group has been successful in the Lords, and will be stepping up its efforts to prevent the Government reversing the vote with its majority in the Commons.Reuse content